DISCOVERING · Fisher Scientific International Inc. One Liberty Lane Hampton, NH 03842 603-926-5911 THE WORLD LEADER IN SERVING SCIENCE DISCOVERING THE FUTURE 2001 ANNUAL REPORT FISHER

Fisher Scientific International Inc.One Liberty LaneHampton, NH 03842603-926-5911www.fisherscientific.com

THE WORLD LEADER IN SERVING SCIENCE

DISCOVERINGTHE FUTURE

2001 ANNUAL REPORT

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CORPORATE PROFILE

Fisher Scientific International Inc. (NYSE: FSH) is the world leader inserving science. We enable scientific discovery and clinical-laboratory testing services by offering more than 600,000 products and services toover 350,000 customers in approximately 145 countries. As a result of itsbroad product offering, electronic-commerce capabilities, and integratedglobal logistics network, Fisher serves as a one-stop source of products,services and global solutions for many of its customers. The company’s primary target markets are scientific research and healthcare. Additionalinformation about Fisher is available on the company’s Web site atwww.fisherscientific.com.

F INANCIAL HIGHLIGHTS

YEARS ENDED DECEMBER 31,

Excludes restructuring and nonrecurring expenses 2001 2000 1999

(in millions except per share amounts)

Sales $2,880.0 $2,622.3 $2,514.5Adjusted operating profit 192.3 164.7 158.0Adjusted EBITDA 267.1 226.8 223.9Adjusted EPS from continuing

operations, diluted $ 1.04 $ 0.96 $ 0.75

See “Selected Financial Data” and “Management’s Discussion and Analysis of Results ofOperations and Financial Condition” for information regarding restructuring and nonrecurringexpenses. EBITDA in 1999 also excludes $7.8 million of gains from asset sales.

TABLE OF CONTENTS

2LETTER TO SHAREHOLDERS

4FISHER AT A GLANCE

6DEFINING THE MARKETSWE SERVEFisher serves scientists engaged in virtuallyevery aspect of research and healthcare.

8CREATING FUTURE PRODUCTS AND SERVICESFisher continuously reviews its product and service portfolio to ensure it meets the demands of today’s scientist.

10PROVIDING EXCELLENCE IN SERVING GLOBALCUSTOMERS With a global network of some 3,000 salesand customer-service representatives, FisherScientific offers its customers the highestlevels of personalized service.

12SEIZING THE FUTURETHROUGH TECHNOLOGICAL LEADERSHIPFor more than 30 years, Fisher has been aleader in e-commerce.

14GLOBAL LOGISTICSTechnology-based service capabilities atour logistics centers worldwide enableFisher to better serve its customers.

16DISCOVER THE FUTUREWITH FISHER

18FINANCIAL REVIEW

INSIDE BACK COVERDIRECTORS, EXECUTIVE OFFICERS, SCIENCE ADVISORS,CORPORATE INFORMATION

DIRECTORS

MITCHELL J. BLUTT, M.D.Executive PartnerJ.P. Morgan Partners, LLC

ROBERT A. DAY JR.Chairman and Chief Executive OfficerTrust Company of the West

MICHAEL D. DINGMANPresident and Chief Executive OfficerShipston Group Ltd.

ANTHONY J. DINOVIManaging DirectorThomas H. Lee Partners, L.P.

DAVID V. HARKINSPresidentThomas H. Lee Partners, L.P.

PAUL M. MEISTERVice Chairman of the BoardFisher Scientific

PAUL M. MONTRONEChairman of the Board andChief Executive OfficerFisher Scientific

SCOTT M. SPERLINGManaging DirectorThomas H. Lee Partners, L.P.

KENT R. WELDONManaging DirectorThomas H. Lee Partners, L.P.

EXECUTIVE OFFICERS

PAUL M. MONTRONEChairman of the Board andChief Executive Officer

PAUL M. MEISTERVice Chairman of the Board

DAVID T. DELLA PENTAPresident and Chief Operating Officer

KEVIN P. CLARKVice President andChief Financial Officer

TODD M. DUCHENEVice President,General Counsel and Secretary

SCIENCE ADVISORS

JOHN I. BRAUMAN, Ph.D.J.G. Jackson-C.J. Wood Professor ofChemistry, Stanford University

CHARLES R. CANTOR, Ph.D.Chief Scientific Officer ofSEQUENOM, Inc., Director of theCenter for Advanced Biotechnology,Boston University

LEROY E. HOOD, M.D., Ph.D.President and Director of theInstitute for Systems Biology

MICHAEL L. SHELANSKI, M.D., Ph.D.Delafield Professor of Pathologyand Chairman of the Departmentof Pathology, Columbia University

CORPORATE INFORMATION

HEADQUARTERSFisher Scientific International Inc.One Liberty LaneHampton, NH 03842Tel: (603) 926-5911www.fisherscientific.com

STOCK LISTINGFisher Scientific common stock islisted on the New York StockExchange under the symbol FSH.

STOCK TRANSFER AGENT AND REGISTRARInquiries concerning transfer requirements, stock holdings, dividend checks, duplicate mailings, and change of addressshould be directed to:Mellon Investor Services, LLC85 Challenger RoadRidgefield Park, NJ 07660Tel: (800) 756-3353www.mellon-investor.com

INVESTOR RELATIONSInvestors and analysts should direct their inquiries to: Director of Investor RelationsFisher ScientificOne Liberty LaneHampton, NH 03842Tel: (603) 926-5911

REQUESTS FOR REPORTSThe Fisher Scientific annual report onForm 10-K or quarterly reports on Form10-Q, as filed with the U.S. Securitiesand Exchange Commission, may beobtained without charge by writtenrequest to the Corporate Secretary at the headquarters address above. Thesereports are also available on theInternet at www.fisherscientific.com and www.sec.gov (search the EDGARArchives for “Fisher Scientific”).

Design: Critt Graham + Associates www.crittgraham.com This annual report was produced on recycled paper. © Fisher Scientific International Inc.

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THE NEXT 100 YEARS

In 2002, Fisher Scientificcelebrates its Centennial.Building on 100 years ofexperience, Fisher is betterpositioned than any othercompany to provide the prod-ucts and services that helpenable researchers to makescientific discoveries.

1. AstraZeneca research associate Mark Zambrowski uses Fisherchemicals in a high-performance liquid chromatography (HPLC) unitto identify a chemical compound.

2. Our large product selection includesconsumables such as the 96-welltray seen here, used for conductingcolorimetric assays, which detectsuch things as proteins, antibodiesand antigens.

3. Fisher Scientific is the primary lab-supply vendor for the University ofPennsylvania and its health system,in addition to many other leadingresearch institutions. Universityresearch specialist Daniel Spellmanperforms protein identification with amass spectrometer in the proteinchemistry lab.

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Fisher Scientific International Inc.2

T O O U R S H A R E H O L D E R S :For Fisher Scientific, 2001 was another outstanding year. We continued to makesignificant progress in achieving our long-term strategic and financial goals, despitethe global economic slowdown, the September 11 attacks and the war on terrorism.Once more, our sales and operating income reached new highs.

Progress in healthcare and life science continued ata rapid pace last year, with growing emphasis onhuman genetic research resulting from the historicmapping of the human genome. These develop-ments are vital to Fisher’s future because we helpenable research and development by providing theessential tools research scientists need.

In 2001, the journals Nature and Science publishedcomprehensive analyses of the draft human genomesequence – 11 years after the Human GenomeProject began – providing information that promisesto significantly advance medical science’s under-standing and treatment of disease.

For example, Science included in its top-10 list ofscientific breakthroughs last year the introduction of a new breed of cancer-fighting pharmaceuticals,or “smart bombs,” targeted to the precise biochemicaldefects that cause certain cancers. Intense activityin the discovery and development of such new medi-cines continues to provide Fisher with importantgrowth opportunities.

IMPROVING OUR OPERATIONSIn 2001, we strengthened our operations in many ways,a few of which follow. We:• Enhanced the portfolio of products and services we

offer to pharmaceutical and biotech customers, andincreased our self-manufacturing capabilities throughkey acquisitions;

• Unified our global chemical activities, enabling us tomaximize our capabilities as a leading manufacturerand distributor of chemicals to the scientific-researchand healthcare markets. To this end, we are expandingour development, manufacture and distribution of bio-chemicals and bioreagents;

• Continued our progress in streamlining distributioncenters, closing six facilities to optimize our logisticscapabilities;

• Consolidated the manufacturing of diagnostic reagentsand controls to increase productivity;

• Launched the MAX/LABTM Furniture System, a newline of mobile, steel workstations that enables pharma-ceutical, biotech and other research companies andinstitutions to create more flexible labs.

PAUL M.MEISTERVice Chairman

PAUL M.MONTRONEChairman and ChiefExecutive Officer

DAVID T. DELLA PENTAPresident and Chief OperatingOfficer

1997 1998 1999 2000 2001

$2,213.7$2,294.4

$2,514.5$2,622.3

$2,880.0SALESin millions

1997 1998 1999 2000 2001

$0.45 $0.47

$0.75

$0.96$1.04EARNINGS PER SHARE

Excludes restructuring and nonrecurring expenses

1997 1998 1999 2000 2001

$109.4

$131.2

$158.0$164.7

$192.3OPERATING INCOMEin millions

Excludes restructuring and nonrecurring expenses

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FOUR ACQUISITIONSThe past year marked the completion of four strategicacquisitions, bringing to 30 the total number of acquisi-tions since 1992. Our acquisition strategy is focused onaccelerating our expansion in our primary markets,scientific research and healthcare, and enhancing ourportfolio of self-manufactured products and pharmaceu-tical services. Our most recent purchase, Cole-ParmerInstrument Company, expands our product offering to thescientific-research market by virtue of that company’sindustry-leading, self-manufactured fluid-managementsystems and instruments.

We also acquired: • Covance’s pharmaceutical packaging services business:

Now called Fisher Clinical Services Inc., this businessis a leading worldwide provider of packaging, labelingand distribution services to major pharmaceutical andbiotechnology companies conducting phase 3 andphase 4 clinical trials of new medicines. The acquisitionis a natural extension of Fisher’s other service offer-ings to these companies, such as custom synthesis fordrug discovery and development; contract formulationand packaging of pharmaceutical, diagnostic andbiotech products; and manufacturing and sourcing of fine, organic and synthetic chemicals.

• Medical Analysis Systems: We have a majority interestin this developer and manufacturer of controls andreagents used by clinical laboratories, further enhanc-ing our self-manufactured diagnostic product line.

• Safety Equipment Company: A distributor of OSHA-compliant safety, health, firefighting and industrial-hygiene equipment in the southeastern United States,SEC expands our presence in the military, municipaland fire-safety markets.

Acquisitions will continue to be an important part of our growth strategy as we seek opportunities to enhanceour margins, expand our distribution capabilities, growour market positions and leverage our existing infra-structure. Companies with high-growth products suchas biochemicals and diagnostic reagents, and those offer-ing services to the pharmaceutical and biotech industry,are particularly attractive acquisition possibilities.

EQUITY OFFERINGSThe company’s strong performance enabled us to com-plete an equity offering in May 2001, successfully selling12.8 million shares of our common stock to fund ouracquisition program. The offering increased public own-ership from approximately 13 percent to 35 percent of our shares outstanding. In February of 2002, theinvestors who participated in our 1998 recapitalizationsold a portion of their shares publicly. The completion ofthis secondary offering of 7.4 million shares of commonstock increased our float to approximately 50 percent ofour shares outstanding.

FINANCIAL HIGHLIGHTSFisher continued its strong financial performance in2001. Revenue growth and operating margins improvedacross all three of our business segments – domesticdistribution, international distribution and laboratoryworkstations. • Revenue increased to a record $2.88 billion, nearly

a double-digit increase compared with the prior year.• Earnings per share, excluding restructuring and

nonrecurring expenses, were $1.04 versus 96 centsin 2000, including the dilutive effect of our equityoffering, which reduced EPS by 11 cents.

• EBITDA, excluding restructuring and nonrecurringexpenses, increased 17.8 percent to $267.1 millionin 2001, compared with $226.8 million in 2000.

• Operating working capital as a percentage of salesimproved to 6.6 percent from 7.6 percent in 2000,excluding the effects of recent acquisitions.

OBSERVING OUR CENTENNIALEarlier this year, we kicked off the celebration of ourcentennial – the 100th anniversary of the birth ofFisher Scientific. In 1902, 20-year-old Chester GarfieldFisher founded Scientific Materials Company, whichhe renamed Fisher Scientific in 1925. Members of thefounding Fisher family led the company for its first 79 years. As we review our rich history, we pay tributeto a company that from its start has served the needsof scientific researchers, providing them with many ofthe instruments, consumables and chemicals thathelped them to discover and invent the products thatchanged our world dramatically in the 20th century.

We salute these distinguished men and women of science, whose contributions are too numerous to detailhere. The vast majority of them were or are Fisher cus-tomers. Among them was famed inventor Thomas AlvaEdison. The holder of a record 1,093 patented inven-tions, Edison was a longtime and daily customer ofEimer & Amend, a pioneering New York City laboratorysupplier Fisher acquired in 1940.

Among other Fisher customers, Henry Ford introducedthe Model T in 1908, and Charles Kettering invented thefirst electric starter for autos in 1911. Selman Waksman isolated streptomycin in 1943; Dr. Jonas Salk success-fully tested his polio vaccine in 1954. Such developmentsand inventions – and many more in the past 100 years– inspire us to continue our work by providing the nextgeneration of scientific entrepreneurs with the researchtools they depend on.

Although we proudly celebrate Fisher Scientific’s first100 years of serving science, we are not a company to dwell on the past. Instead, we focus on the future,planning our strategy to continue serving scientific discovery in the next 100 years. We are confident andexcited about the opportunities that lie ahead in lifescience and healthcare – as well as in new disciplinescertain to emerge in the 21st century. Our talentedteam of 8,900 employees worldwide, a constant sourceof our success, is poised to take us there. We invite youto join us on our journey – and discover the future withFisher Scientific.

Our optimistic outlook also derives from Fisher’sunique heritage as well as our loyal customers andsuppliers, many of whom have been with us since thecompany’s early years. In addition, we wish to recog-nize our directors and investors for their continuingsupport. We thank you all.

PAUL M. MONTRONEChairman and Chief Executive Officer

March 20, 2002

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KEY FINANCIALS 2001

Sales $2.88 billion

Operating Income $192.3 million (Excludes restructuring and nonrecurring expenses)

FAST FACTS

Founded: 1902

Stock Symbol: NYSE: FSH

Distribution Centers: 4225 Domestic, 17 International

Products: 600,000

Strategic Suppliers: 6,000

Customers: 350,000

Countries Served: 145

Number of Employees: 8,900

Orders Processed Daily: 25,000

PRINCIPAL CUSTOMERS

RESEARCHLife scienceBiotechnologyPharmaceuticalMedical technologyResearch institutionsMedical schools and

universitiesGovernment labsQuality-control labsEnvironmental labsIndustrial labs

HEALTHCAREGroup purchasing

organizationsIntegrated delivery networksNational, regional and

specialty reference labsHospitalsAlternate care sitesPhysicians’ office labs

SAFETYUsers of occupational

health and safety products

Clean rooms and controlled environments

FirefightersMilitary

SELECTED PRODUCTS AND SERVICES

LIFE SCIENCE/DRUG DISCOVERY Liquid-handling systems; life-science reagents; DNA purification kits; microarray readers; thermalcyclers; electrophoresis power supplies

FINE AND HIGH-PURITY CHEMICALSWide range of laboratory reagents, organics and bio-chemicals; high-purity solvent applications for DNAsynthesis and separation science; organic synthesisproducts with a focus on drug discovery – combinato-rial library services, specialization in chiral chemistryand drug-like intermediates; synthesis capability for intermediates supported by strong developmentchemistry and kilo manufacture to cGMP stan-dards; scale-up expertise with ability to supply largequantities of specific reagents and intermediates to the pharmaceutical industry; state-of-the-art re-packaging and distribution facilities for customizedquantities of pharmaceutical intermediates

HEALTHCARE: CLINICAL LABORATORY DIAGNOSTICSInstrument systems for chemistry, immunoassay,microbiology, blood culture, drugs of abuse, cardiacassessment and coagulation; comprehensive molecu-lar diagnostics, cytology and histology portfolio; broad selection of rapid diagnostic kits covering routine and life-threatening tests for immediatephysician intervention

LAB EQUIPMENTBalances; water purification equipment; spectrophotometry equipment; HPLC instrumentation;water quality tests; pH meters; centrifuges; pumps;microscopes; and heating and cooling equipment

DIAGNOSTIC MANUFACTURING Development and manufacturing of devices forcoagulation, hematology, clinical chemistry,immunology, microbiology, histology and cytology;process development for antibody purification andorganic synthesis; and validation of manufacturingprocesses to ensure product specifications are met

CLINICAL SERVICESState-of-the-art cGMP packaging, labeling, distributionand supply-chain management services for pharmaceu-tical and biotechnology companies conducting clinicaltrials for new medicines and disease therapies

AT A G L A N C E

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FLUID-MANAGEMENT SYSTEMS AND INDUSTRIALPROCESS CONTROL INSTRUMENTATIONSpecialty technical instruments including those for:fluid handling including flow-control equipment,pumps, valves and fittings; process control such astemperature, pressure and pH control; and environ-mental and water-quality testing

LAB WORKSTATIONSLaboratory casework and airflow products, providingcustomers with the widest selection of high-quality,differentiated laboratory products in combinationwith comprehensive engineering, project manage-ment and installation services

LAN WORKSTATIONS Technical furniture including consoles, worksta-tions and enclosures, providing the most efficientand scalable data center environment; customizedsolutions for total network monitoring

SAFETYPersonal protective equipment; environmentalmonitoring and sampling equipment; respiratoryprotection equipment; ergonomics products; fire-fighting gear; hazardous storage and handlingequipment; and facilities maintenance supplies

SCIENCE EDUCATIONFull line of equipment, supplies and instructionalmaterials for all disciplines of science education:biology, chemistry, physics, life science andearth/environmental sciences; products for multimedia presentation, data acquisition and laboratory safety

OTHER SERVICESLab instrument and safety equipment calibrationand repair; ISO 9002 scientific certification; main-tenance and warranty service; integrated packageof such services also available on site to assistcustomers in accreditation, fixed-asset manage-ment, budget planning and forecasting

STRENGTHS

FISHER SCIENTIFIC BRAND NAME• Widely recognized and respected name in the

research and healthcare industries• More than two million catalogs published biennially,

including the Fisher Catalog, a standard referencetool for scientists worldwide

• Distinctive Fisherbrand™ products

ONE-STOP SHOP FOR THE SCIENTIST• More than 600,000 products and services,

providing one-stop shopping for the research, clinical laboratory and safety-supply needs of our customers

• Wide range of value-added services includingspecialized logistics services, pharmaceuticalpackaging and supply-chain management

• Additional new products and services targeted at high-growth areas such as life science

STATE-OF-THE-ART LOGISTICS CAPABILITIES• Global infrastructure system that seamlessly

links distributors, customers and suppliers• Fully integrated global distribution network• 42 distribution facilities• Rapid product delivery: approximately 95 per-

cent of orders in the United States are shippedwithin 24 hours of order placement

PREMIER AND DIVERSIFIED CUSTOMER BASE• More than 350,000 customers worldwide,

including some of the largest and fastest-growing companies in the life-science andhealthcare markets

GLOBAL SOURCING EXPERTISE• Strategic relationships with more than 6,000

key suppliers• Self-manufacturing resources, enabling Fisher to

offer standardization and cost reduction opportu-nities to its customers

TECHNOLOGICAL LEADERSHIP• 35 years of e-commerce technology experience• Systems, services and low-cost integrated-

procurement solutions for customers• Created fishersci.com: the world’s most

comprehensive virtual marketplace for scientificsupplies, and one of the most technologicallysophisticated e-commerce sites in the industry

GLOBAL SALES AND MARKETING NETWORK• 3,000 sales and customer-service reps, including

technically trained life-science, chemical andsafety specialists, many of whom have scientificand medical backgrounds

THE FIRST 100 YEARS1902. Chester G. Fisher founds Scientific Materials Company on May 6, 1902, in Pittsburgh. Twenty-year-old Fisher, a recent engineering graduate, saw the need for a company that would supply the scientific tools for Pittsburgh’s many industries, including the burgeoning steel business.1902

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HEALTHCARE

RESEARCH

SAFETY


RESEARCH: Dr. James Dowling, a scientist in Biogen’s medicinal chemistry department,synthesizes a new chemical compound. Biogen,a Fisher customer for 15 years, is a biotechnologycompany whose research activities are focused ondeveloping novel products to treat inflammatoryand autoimmune diseases, neurological diseases,cancer, fibrosis and congestive heart failure.

HEALTHCARE: At LabCorp’s Center forEsoteric Testing, senior technologist KarenDevine examines an isoelectric plate for thepresence of a protein related to a genetic res-piratory problem. Fisher HealthCare providesLabCorp with many of the products needed inthe administration and evaluation of specializedtests, including chemicals, diagnostic kits forsickle cell screening, and pipette tips as wellas sample-handling and collection tools.

SAFETY: Fisher supplies industrial-safetyequipment and protective gear used in clean-room environments where high-tech electronicdevices are produced.

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SCIENTIF IC RESEARCHLeading corporate, university and governmentresearch labs turn to us because we offer thebroadest range of products and services to scien-tists, a Fisher tradition for a century. Turning emptyspaces into complex life-science labs, we work withcustomers from the initial design of their laborato-ries to completion. Our comprehensive line of labfurniture includes modular, flexible workstationsand fume hoods that enable scientists to readilyadapt to changes in research projects and equip-ment. We also provide the instruments, equipment,bioreagents and other supplies needed to conductresearch, such as electrophoresis systems for genetic research and well plates for automatedhigh-throughput screening of potential new medi-cines. Fisher’s customer-oriented systems and technology-based logistics services complement all of these products.

In the past decade, total research and developmentspending in the United States, excluding defense and electronics R&D, more than doubled – from$83.4 billion in 1990 to an estimated $190.5 billion in2000, which has helped drive Fisher’s growth. Recentadvances in mapping the human genome have led toincreased spending in life-science research, a princi-pal Fisher market. As scientific focus changes, Fisherchanges with it, always preparing for the emergenceof new sciences. Because 80 percent of the company’sproducts are consumables, used every day regardlessof capital constraints, our business is extremely recession resistant.

HEALTHCAREIncreased activity stemming from the HumanGenome Project is also expanding the healthcaremarket. As molecular biologists identify specificgenes linked to one’s predisposition to a disease,scientists can develop diagnostic tools for advancedscreening at clinical labs. The early detection ofdiseases leads to early intervention and treatment,resulting in better care at a lower cost. Consumersare also expected to have access to a broaderrange of rapid diagnostic tests in their drugstores.The aging population and physicians’ demand formore specialized tests will continue to contribute toFisher’s growth because we provide many of theproducts and supplies needed to administer andevaluate such tests, some 5 billion of which wereconducted in the United States last year.

SAFETY AND QUALITY CONTROLExtending our offering beyond the research andhealthcare markets, Fisher also provides environ-mental, bio-safety and quality-control products andservices in the occupational health and safety market.From personal protective equipment and supplies for controlled environments (clean rooms) to respira-tors and other industrial equipment for firefightersand military personnel, Fisher has a complete line ofproducts and services needed to help keep peoplesafe on the job. We also offer online, Web-basedsafety-training programs.

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DEFINING THE MARKETSWE SERVE

THE FIRST

100 YEARS1917. Company supportsU.S. Chemical WarfareService to counteract mustard gas used by theGerman army. ChesterFisher rounds up sevenrailroad carloads of sup-plies to produce a completeresearch laboratory for the AmericanExpeditionary Force. 1917

1960 1965 1970 1975 1980 1985 1990 1995 2000E

$6.0 $9.0 $14.7$32.0 $44.2

$57.5$83.4

$121.4

$190.5

GROWING RESEARCH AND DEVELOPMENT SPENDINGin billions

Source: NSF, PhrMa and management estimates

(excluding defense and electronics)

1998 1999 2000 2001 2002

$13.6$15.7

$17.9$20.4

$23.3

GROWING NATIONAL INSTITUTES OF HEALTH BUDGET in millions

Source: NIH

Fisher Scientific primarily operates in two markets, both of which are largeand growing: scientific research and healthcare. We serve scientists engagedin virtually every aspect of basic research and development. We also providediagnostic products for clinical laboratories and packaging services for phar-maceutical companies conducting clinical trials of new medicines.

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ENHANCING OUR PORTFOLIOWe utilize strong vendor relationships and strategicacquisitions to build our proprietary product portfolio.The recent acquisition of Cole-Parmer InstrumentCompany added self-manufactured products to theFisher portfolio in 2001. Cole-Parmer brought fluid-management systems of its own manufacture,notably the MasterFlex® product line, which is wellknown in the life-science and healthcare markets.In 2002, we signed an exclusive agreement withShimadzu Scientific Instruments for the distributionof its high-performance liquid chromatography(HPLC) instruments in the United States.

CLINICAL-LAB OFFERING Our majority interest in Medical Analysis Systems, a manufacturer of quality-control products andreagents, enhances Fisher’s line of clinical diagnos-tics. By working closely with customers engaged in esoteric and gene-based testing, we can antici-pate their future needs and deliver the necessaryproducts. Our customers also rely on us to bring tomarket the latest rapid diagnostics and instrumenta-tion. In November, we introduced a new state-of-the-art line of ABX hematology instrumentation,reagents and controls that meet the needs of every

laboratory size, from smaller models for physicians’offices to high-end units for large reference andhospital labs.

F ISHER SCIENTIF IC CHEMICALS ANDBIOREAGENTSTo further support the rapid expansion of life-science research, we are expanding our chemicalportfolio, especially in biochemicals and bioreagents.Fisher’s new bioreagent line meets the stringentworldwide standards of pharmaceutical manufacturers.We are achieving rapid growth in our biotechnologyline, which includes such products as restrictionenzymes, cell growth media, nuclease- and pro-tease-free reagents, gels, buffers and stains that are used in many electrophoresis, cell-culture andmolecular-biology applications. In addition, Fisherproduces thermostable enzymes, nucleotides andreaction buffers for researchers amplifying DNA bymeans of polymerase chain reactions (PCRs).

With our ever-expanding biochemical and biore-agent portfolio, and our well-established analyticaland organic chemical lines, Fisher is poised tobecome the leading worldwide manufacturer anddistributor of chemicals serving the scientific-research and healthcare communities.

PHARMACEUTICAL SERVICESFisher Clinical Services provides a complete line ofclinical packaging services, from over-encapsulationto manufacturing, packaging, labeling, logistics anddistribution. We continue to develop new and innova-tive products and services for the pharmaceuticalindustry, such as custom software that serves as an automated supply-chain tool for clinical trials.This fully integrated packaging and distribution- services program enables customers to conduct trialsfaster and more efficiently than ever before.

MOBILE LAB WORKSTATIONSAs the world’s leading manufacturer of laboratorycasework and airflow products, Fisher Hamiltonoffers its customers the widest selection of high-quality, differentiated workstations coupled withcomprehensive engineering, project managementand installation services, simplifying new lab con-struction and remodeling projects. The companyrecently launched the MAX/LAB Furniture System, anew line of mobile, steel workstations that enablespharmaceutical, biotech and other research companiesand institutions to create more flexible labs.


Fisher Scientific’s portfolio includes more than 600,000 products and services.Private-labeled or exclusive products represent some 20 percent of our sales, andself-manufactured products represent an additional 20 percent of sales. Wework closely with more than 6,000 suppliers to source the rest of our products.

THE FIRST

100 YEARS1904. Founder Chester Fisherpublishes his first catalog, the Scientific Materials Co.Catalog of LaboratoryApparatus & Supplies.

1921. Company introducesits own burner, developed byEdwin Fisher, brother of thefounder. The Fisher burnerwas hailed as the mostimportant improvement inburners since the originalBunsen burner was intro-duced circa 1888.

CREATING FUTURE PRODUCTS

AND SERVICES1904

1921

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1. Fisher’s acquisition of Cole-Parmer added the industry-leading MasterFlex fluid-handling system product line to our portfolio.In the product-life test room, mechanical technician Ben Chanthaboury tests the durability of MasterFlex pump heads andtubes that have many applications, including the cooling of equipment and removal of excess moisture in medical procedures.

2. To streamline manufacturing, Fisher operates high-speed computer-programmed machines such as this one, which placeselectronic components on printed circuit boards at a rate of 12,000 parts per hour. The finished boards are used in a numberof our self-manufactured products, including peristaltic pumps.

3. Product inspector Ai Choo Lim tests the printed circuit board assembly of a field monitor used to measure pH. Cole-Parmer’sproduction facility in Singapore expands our global manufacturing capabilities.

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2

3

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1. Schering-Plough assistant scientist Mandy Zhu uses Fisherchemicals to prepare a standard solution for analyzing theyield of a chemical reaction. Fisher supplies Schering-Plough,a global pharmaceutical company, with many of its chemicalsand life-science products as well as safety equipment and protective clothing.

2. Scientist Cathy Dantzman conducts research in AstraZeneca’ssynthesis lab. AstraZeneca, one of the world’s leading pharma-ceutical companies, utilizes FisherPaks – reusable 50- to1,360-liter drums (left) – because they can be plumbed intothe lab’s special instrumentation to conveniently dispenseprocess solvents.

3. Associate scientist Adrienne Dillard selects bioreagents fromFisher’s CORE (Convenient On-Site Replacement) cabinetlocated in one of AstraZeneca’s high-throughput screeninglaboratories. As a value-added service, Fisher provides cus-tomers with on-site inventory management of their most critical chemical supplies.

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For 100 years, Fisher Scientific has proudly offered its customers the highest levelsof personalized service.

GLOBAL EXPANSIONThe company first began serving international customers in 1926, when it established an operationin Montreal. In succeeding decades, other Canadianbranches were added. In those years, Fisher beganto build its export business, based largely on the selling power of the comprehensive Fisher Catalog,the industry standard since 1904. Since 1992,Fisher has rapidly expanded its international busi-ness. Currently, Fisher has operations in 22 countriesand serves customers in more than 145 countries.

UNMATCHED SALES AND CUSTOMER SERVICEFisher has one of the most comprehensive, technicallytrained sales and customer-service teams serving theresearch and healthcare industries. The companyboasts a powerful global sales and marketing networkcomprising approximately 3,000 men and women,many of whom have scientific or medical backgrounds.Within this network are technically trained life-science,chemical, equipment and business-solutions special-ists who provide their expertise to our customers, help-ing them make better-informed purchasing decisions.

DIVERSE CUSTOMER BASEFisher Scientific has more than 350,000 customersaround the globe. This diverse clientele ranges fromsmall, start-up venture companies to such leadingmultinational pharmaceutical and biotech companies as AstraZeneca, Biogen, Merck and Schering-Plough. It also includes major healthcare providers and national reference labs, such as Tenet Healthcareand Laboratory Corporation of America, in addition togroup purchasing organizations AmeriNet, Broadlaneand Premier, among others. For the past three years,no single customer represented more than 5 percentof Fisher’s total sales.

PROVIDING EXCELLENCE IN SERVING GLOBAL CUSTOMERS

EARLY1900sTHE FIRST 100 YEARS1940. Fisher Scientific Company acquires its originalsupplier, New York City-based Eimer & Amend.Founded in 1851, the firm (above) was a pioneerimporter of European laboratory supplies, servingThomas Edison, E.R. Squibb, Charles Steinmetz,Henry Ford and many other notable customers.Founder Bernard Amend was involved in the estab-lishment of the American Chemical Society.

1940

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E-COMMERCE CAPABIL IT IESWith more than 170,000 registered users now visiting our premier Web site – fishersci.com –we continue to enhance our e-commerce capabili-ties worldwide, providing superior functionality and navigation as well as enhanced requisition man-agement and rapid ordering. Backed by Fisher’ssophisticated logistics network, our domestic andinternational e-commerce sites provide virtual linksto customers’ resource-planning, procurement andaccounting systems. With a mouse click, customerscan place orders and replenish inventory. We reducesupply-chain costs by utilizing technology whereverpossible to drive down procurement expenses, thuscreating significant value for our customers.

OTHER TECHNOLOGIESWe also apply state-of-the-art technology to stream-line our own processes and improve efficiencies inmany areas of our business, from inventory controland shipment tracking to computer-aided designand the automation of manufacturing. We usecomputer-aided design, for example, to conceptual-ize and model housing for products we manufacture,such as fluid-management systems. Such housing is designed online and reviewed with customerselectronically, eliminating more costly and time-consuming physical modeling of samples. Printedcircuit boards are also laid out online. Diagramsare then electronically transferred to automatedsurface-mount assembly machines, which createprograms to manufacture the boards. On themanufacturing floor, Fisher uses knowledge-basedmanagement systems that enable employees toinstantly access design diagrams of the productsbeing manufactured.


Fisher has long been a technological leader, providing customers with systems, services and low-cost integrated procurement solutions designed to reduce our customers’ supply-chain costs. Beginning with the introductionof the scientific-supply industry’s first electronic order-entry system in1967, Fisher has been engaged in what is now called electronic commercefor 35 years. Today, 18 percent of our sales come from e-commerce, up from 8 percent in 1998.

SEIZING THE FUTURETHROUGH TECHNOLOGICAL LEADERSHIP

1967

THE FIRST

100 YEARS1967. CPU to CPU: Fisherfirst became engaged in e-commerce in 1967 when the company introduced itselectronic order-entry systemto transmit orders from aUniversity of Pittsburgh terminalto Fisher’s mainframe.

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1. Intermediate drafter Judy Prattuses computer-aided design soft-ware to configure the layouts ofprinted circuit boards and to designhousing for a fluid-handling pump.Our use of technology-based programs dramatically reduces product-development time.

2. Fishersci.com offers customers easynavigation, account-specific pricing,access to Fisher’s broad range ofproducts and services and compre-hensive literature that makes findingthe right product a snap. SmartBusiness magazine ranked FisherScientific among the top 50 compa-nies in successfully expanding andenhancing their businesses by usingthe Web. Fishersci.com also won theToday’s Chemist award for Internetaccessibility.

3. Medical technologist Maria Gallagherorders clinical-lab supplies on thefishersci.com Web site. Located in Virginia, Fairfax Hospital is a member of the Inova HealthSystem and one of a growingnumber of medical-care centersthat utilize corporate credit cardsto pay directly for products orderedfrom our Web site, improving themanagement of payables andreceivables.

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GLOBAL

1. Using advanced logistics systems such as radio-frequency technology and automated material handling, Fisher’s distribution centers complete morethan 25,000 shipments per day.

2. Fisher’s state-of-the-art 350,000 square-foot logistics facility in Chicago isour flagship distribution center in the United States, providing next-day service to customers throughout the Midwest.

3. Our largest distribution centers house sophisticated conveyor system net-works, this one stretching nearly two miles in length, and high-speed sortersthat process up to 120 cartons per minute using bar-code technology.

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ADVANCED INVENTORY MANAGEMENTFisher was one of the first companies in any industryto introduce computer-based inventory management,in 1967. Today our advanced systems automatewarehouse design and management, material han-dling and transportation management, ensuring higherproductivity, faster order processing and flexibility inproduct mixes, types and volume. Radio-frequencytechnology improves order accuracy and providesreal-time reporting.

SUPPLIER INTEGRATIONWorking closely with its suppliers, Fisher has beenable to streamline its supply chain. Fisher receivesadvanced shipping notifications (ASNs) electronically,resulting in a more efficient receiving process.Through the use of product bar-coding and radio-frequency technology, we are able to reduce thereceiving process time. Fisher also collaborates withsuppliers on transportation, inbound load scheduling,order quantities and other supply-chain requirements.Fisher uses demand forecasting and sophisticatedplanning systems to control inventory levels.

DISTRIBUTION EFF IC IENCY, ON-SITE SUPPORTOur technology-based distribution network shipsapproximately 95 percent of our domestic customerorders within 24 hours of placement. With a dedi-cated fleet of trucks supplementing third-partyshippers, Fisher tailors its delivery to meet customerneeds. For many domestic and global accounts,Fisher provides on-site customer-service and salesrepresentatives who manage the entire procurementprocess, including customers’ inventories, and oftenprovide just-in-time delivery of critical products toindividual labs within minutes. This specializedservice enables pharmaceutical and biotech com-panies, clinical labs and other Fisher customers to concentrate their full efforts on their primaryresponsibilities, leaving the logistics to us.

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THE FIRST

100 YEARS1952. Company founderC.G. Fisher discusseswarehouse managementtechniques with employ-ees during his visit toFisher’s new distributioncenter in Toronto.

1952

Fisher Scientific has technology-based servicecapabilities at each of its 42 logistics centersworldwide, enabling the company to better servethe needs of its diverse customers – from smallstartup ventures to large multinational enterprises.

LOGISTICS

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Fisher Scientific International Inc.16 Fisher Scientific International Inc.16

DISCOVER THE FUTURE WITH FISHER

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1. At LabCorp’s Center for Esoteric Testing, technolo-gist Jon Setliff tests samples for the presence ofantigens indicating such diseases as tuberculosis andLegionnaires’ disease. The growth of patient-test eval-uations at facilities like LabCorp’s contributes toFisher’s growth in the healthcare market.

2. Our Fisherbrand self-manufactured product lineincludes consumables and equipment, such as multichannel pipetters and pipette tips, to meet theneeds of scientific-research and clinical laboratories.

3. In Biogen’s media preparatory lab, scientist MichaelMurphy creates buffers used by researchers in thedevelopment of new disease treatments. Fisherstocks Biogen’s media prep lab with chemicals, life-science products and equipment.

4. Research specialist Lynn Spruce performs peptide,or protein, synthesis using some of Fisher’s newbioreagents at the University of Pennsylvania proteinchemistry lab.

5. At the University of Pennsylvania cancer center, grad-uate student Sara Cullinan conducts an experiment ina Fisher Isotemp Plus chromatography refrigerator.

6. At our Eutech Instruments facility in Singapore,quality control technician Alex Kwa conducts finaltesting of a laboratory bench-top meter. The meter,used to measure pH levels in liquids, is tested with a pH electrode and standard buffer solutions.

7. Fisher Clinical Services pioneered the use of roboticsin clinical supplies – allowing multiple products tobe efficiently and safely packed into a single blistercard for use in trials of new medicines.

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FINANCIALREVIEW

TABLE OF CONTENTS

19SELECTED FINANCIAL DATA

20MANAGEMENT’S DISCUSSIONAND ANALYSIS

28STATEMENT OF OPERATIONS

29BALANCE SHEET

30STATEMENT OF CASH FLOWS

31STATEMENT OF CHANGES INSTOCKHOLDERS’ EQUITY(DEFICIT) AND OTHERCOMPREHENSIVE INCOME(LOSS)

32NOTES TO FINANCIALSTATEMENTS

50INDEPENDENT AUDITORS’REPORT

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SELECTED FINANCIAL DATA

19

This summary of selected financial data for the five years in the period ended December 31,2001 should be read in conjunction with Management’s Discussion and Analysis of Resultsof Operations and Financial Condition and the Financial Statements presented elsewhereherein. See Note 1– Formation and Background and Note 3 – Summary of SignificantAccounting Policies for a further discussion of the basis of presentation, principles ofconsolidation and defined terms.

Year Ended December 31, 2001 2000 1999 1998 1997

(in millions, except per share amounts)

STATEMENT OF OPERATIONS DATA:Sales $2,880.0 $2,622.3 $2,514.5 $2,294.4 $2,213.7Income from operations (a) 131.1 156.3 146.8 22.8 21.1Net income (loss) (b) 16.4 22.7 23.4 (49.5) (30.5)

SHARE DATA:Net income (loss) per common share (b):

Basic $ 0.33 $ 0.57 $ 0.59 $ (1.24) $ (0.30)Diluted 0.31 0.51 0.55 (1.24) (0.30)

Weighted average shares outstanding:Basic 49.4 40.1 40.0 40.0 101.5Diluted 53.0 44.4 42.8 40.0 101.5

Dividends declared per common share: $ – $ – $ – $ – $ 0.012

BALANCE SHEET DATA (AT END OF YEAR):Working capital $ 120.1 $ 142.8 $ 115.3 $ 107.9 $ 237.5Total assets 1,839.2 1,385.7 1,402.6 1,357.6 1,176.5Long-term debt (c) 956.1 991.1 1,011.1 1,022.0 267.8

(a) Includes $61.2 million ($38.5 million, net of tax) of restructuring and other nonrecurring charges in 2001, $8.4 million ($5.2 million, net of tax) of restructuring credits and other nonrecurring charges in 2000,$11.2 million ($8.6 million, net of tax) of restructuring and other nonrecurring charges in 1999, $108.4 mil-lion ($68.9 million, net of tax) of Recapitalization-related costs, restructuring and other nonrecurring chargesin 1998 and $88.3 million ($69.5 million, net of tax) of restructuring and other nonrecurring charges in 1997.Refer to Management’s Discussion and Analysis of Results of Operations and Financial Condition.

(b)Net income (loss) includes the amounts described in (a) above and 2000 includes a $23.6 million ($14.9 million, net of tax) write-down of investments in certain Internet-related ventures and 1997includes $5.0 million ($2.9 million, net of tax) of nonrecurring charges and a $5.3 million write-off of deferred tax assets related to certain foreign locations.

(c) The Recapitalization, which was consummated on January 21, 1998, resulted in a significant increase in long-term debt.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION


OVERVIEW

We report financial results on the basis of three business segments: domestic distribution,international distribution and laboratory workstations. The domestic distribution segmentengages in the supply, marketing, service and manufacture of scientific, clinical, educa-tional, and occupational health and safety products. Additionally, this segment providescontract manufacturing and pharmaceutical packaging services. The international distri-bution segment engages in the supply, marketing and service of primarily scientificresearch products. The laboratory workstations segment manufactures laboratory work-stations, fume hoods and enclosures for technology and communication centers. Until1999, we operated a fourth segment, technology, which was disposed of through the spin-off of ProcureNet, a provider of outsourcing and supply-chain-management technology, inApril 1999 and the sale of our UniKix Technology software business in July 1999.

In February 2001, we acquired the pharmaceutical packaging services business of Covance,which we renamed Fisher Clinical Services Inc. (“FCS”). FCS enables pharmaceutical and biotechnology customers to outsource the packaging, labeling and distribution of newmedicines undergoing phase 3 and phase 4 clinical trials. We paid an adjusted purchaseprice of $132.7 million in a cash transaction. The results of FCS have been included inthe domestic distribution segment from the date of acquisition.

In May 2001, we sold 12.8 million shares of common stock in a public offering at a priceof $24.00 per share. Net proceeds to the Company, after deducting the underwritingdiscount and expenses, were approximately $289.9 million. The proceeds of this offeringwere used to fund acquisitions during the year. In connection with that offering we accel-erated the vesting of options to purchase approximately 2.3 million shares of commonstock and converted them into 1.0 million shares of common stock, that were depositedinto a rabbi trust. We recorded a primarily noncash compensation charge of $33.5 millionduring the first quarter of 2001 as a result of this conversion.

In June 2001, we acquired a controlling interest in Medical Analysis Systems, Inc. (“MAS”) after having acquired a non-controlling interest in March 2001. MAS is a leadingmanufacturer of controls and reagents for the clinical laboratory market. Prior to June 2001,we accounted for our investment in MAS using the equity method of accounting. In July2001, we acquired Safety Equipment Company (“SEC”), a distributor of safety supplies andpersonal protection equipment. These acquisitions had an aggregate purchase price ofapproximately $30 million. The results of MAS and SEC have been included in the domesticdistribution segment from their respective dates of acquisition.

In November 2001, we acquired Cole-Parmer Instrument Company and its affiliatedcompanies (“Cole-Parmer”). Cole-Parmer is a leading worldwide manufacturer and distribu-tor of specialty technical instruments, appliances, equipment and supplies. The purchaseprice was $208.5 million in cash. The results of Cole-Parmer have been included in thedomestic distribution segment from the date of acquisition.

During 2001 we implemented two restructuring plans focused on the following areas:further integrating our international operations into Pan-European and Pan-Asian businessunits to maximize synergies; continued consolidation of our domestic distribution facilitiesto increase efficiencies and lower costs; the consolidation of all our chemical manufacturing,distribution, and sales and marketing activities to drive increased sales growth and earn-ings and overall streamlining of our workforce. We recorded a charge of $27.0 million relatedto these plans. We also incurred $1.5 million for inventory write-offs related to the plans.

RESULTS OF OPERATIONS

The following table sets forth our sales and income (loss) from operations by segment (in millions):

Sales Income (Loss) from Operations

2001 2000 1999 2001 2000 1999

Domestic distribution $2,439.9 $2,187.3 $2,015.4 $173.4 $149.8 $131.8

International distribution 425.4 418.5 446.9 13.6 11.5 6.3

Laboratory workstations 178.6 165.2 192.0 4.9 3.5 25.4

Technology – – – – – (6.1)Eliminations (163.9) (148.7) (139.8) 0.4 (0.1) 0.6

Segment sub-total 2,880.0 2,622.3 2,514.5 192.3 164.7 158.0

Restructuring and other charges (credits) – – – 59.7 (2.0) (1.5)

Nonrecurring charges – – – 1.5 10.4 12.7

Total $2,880.0 $2,622.3 $2,514.5 $131.1 $156.3 $146.8


21

SALES

Sales increased 9.8% to $2,880.0 million in 2001 from $2,622.3 million in 2000.Excluding the impact of foreign exchange, sales increased 10.5% for 2001. Sales increased4.3% to $2,622.3 million in 2000 from $2,514.5 million in 1999. Excluding the impactof foreign exchange, sales increased 5.9% in 2000. The increase in the growth rate in 2001compared to 2000 is predominately attributable to the four acquisitions we completedduring 2001. Excluding the impact of foreign exchange, we expect sales growth to rangebetween 11.0% to 12.0% for 2002, reflecting growth in our base business and the impact of acquisitions completed during 2001.

Sales in the domestic distribution segment increased 11.6% to $2,439.9 million for 2001 from $2,187.3 million in 2000. Domestic distribution sales increased 8.5% to$2,187.3 million in 2000 from $2,015.4 million in 1999. Each of our four acquisitionscompleted during 2001 and our acquisition in 2000 has been reported in our domesticdistribution segment. We expect domestic distribution sales growth to range between 13.0%to 14.0% for 2002, reflecting growth in our base business and the impact of acquisitionscompleted during 2001.

Sales in the international distribution segment increased 1.7% to $425.4 million for 2001from $418.5 million in 2000. Excluding the impact of foreign exchange, sales increased5.5% for 2001. International distribution sales decreased 6.4% to $418.5 million in2000 from $446.9 million in 1999. Excluding the impact of foreign exchange, salesincreased 1.5% in 2000. The increase in growth rate was attributable to increased volumein Europe and Asia-Pacific. We expect international distribution sales growth to rangebetween 3.5% to 4.0% for 2002, excluding the impact of foreign exchange. The growthrate in 2002 is forecasted to decrease due to the possible disruption associated with theimplementation of our fourth quarter 2001 restructuring plan and our focus on improvingoperating margin.

Sales in the laboratory workstations segment increased 8.1% to $178.6 million for 2001 from $165.2 million in 2000. Laboratory workstations’ sales decreased 14.0% to$165.2 million in 2000 from $192.0 million in 1999. We experienced a strong reboundin growth from 2000 to 2001 resulting in increased order activity and backlog growth of11.0% to $110.1 million. The sales decline in the laboratory workstations segment from1999 to 2000 was due primarily to a slowdown in the industrial research laboratoryconstruction market. We are forecasting laboratory workstation sales growth to rangebetween 2.5% to 3.0% for 2002.

GROSS PROFIT

Gross profit increased 13.7% to $737.2 million or 25.6% of sales for 2001 from $648.3 million or 24.7% of sales in 2000. Gross profit increased 3.1% to $648.3 millionin 2000 from $629.1 million or 25.0% of sales in 1999. The increase in gross profit as apercentage of sales from 2000 to 2001 was attributable to acquisitions completed during2001. Gross profit was reduced by $1.5 million for inventory write-offs related to therestructuring plans implemented during 2001, of that, $1.1 million related to our domesticdistribution segment and $0.4 million related to our international distribution segment.The decrease in gross profit as a percentage of sales from 1999 to 2000 was primarilydue to a decline in sales volume and a change in the product mix in our laboratory work-stations segment. Gross profit in 1999 was reduced by $5.3 million for inventory write-offsas a result of a change in our product portfolio. We expect gross profit as a percentage of salesto improve in 2002 primarily due to acquisitions completed during 2001 and our continuedstrategy to increase sales of our higher margin proprietary products.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSE

Selling, general and administrative expense increased 10.6% to $546.4 million or 19.0%of sales for 2001 from $494.0 million or 18.8% of sales in 2000. Selling, general andadministrative expense increased 4.6% to $494.0 million in 2000 from $472.5 millionor 18.8% of sales in 1999. In 2000, selling, general and administrative expense included$5.5 million of costs for business combinations not consummated, $3.7 million ofnoncash compensation expense related to a change in the terms of certain common stockoptions and $1.2 million of expense related to targeted workforce reductions. Excludingthose charges, selling, general and administrative expense as a percentage of sales was18.4% for 2000. The increase in selling, general and administrative expenses as a percent-age of sales in 2001 was primarily due to acquisitions. In 1999, selling, general andadministrative expense included $2.2 million of expenses associated with our warehouseconsolidation plan. Excluding those expenses, selling, general and administrative expenseas a percentage of sales was 18.7% for 1999. The decrease in selling, general and admin-istrative expenses as a percentage of sales from 1999 to 2000 was primarily the result offixed cost leverage. We expect to show improvement in selling, general and administrativeexpenses as a percentage of sales in 2002 due to the change in accounting principlesgenerally accepted in the United States of America for the nonamortization of goodwill.Goodwill amortization for 2001 was $7.8 million, $5.1 million and $3.8 million for thedomestic distribution, international distribution and laboratory workstations segments,respectively. Excluding amortization of goodwill we expect selling, general and adminis-trative expense as a percentage of sales to increase in 2002 due to our acquisitionscompleted in 2001 partially offset by fixed cost leverage.



RESTRUCTURING AND OTHER CHARGES

During the first quarter of 2001, we adopted and commenced implementation of astreamlining plan aimed at improving operations, largely through office, warehouse andmanufacturing facility consolidations and the discontinuance of certain product lines. As a result of these actions, we recorded a restructuring charge of $18.1 million. Therestructuring charge reflects $10.9 million related to estimated employee separation costsand $7.2 million of exit costs. The charge for employee separation arrangements relates to termination and other severance costs associated with 518 salaried and hourly employ-ees severed as part of this plan. The exit costs represent primarily lease-cancellation costs and costs associated with the discontinuance of certain product lines. The domesticdistribution, international distribution and laboratory workstations segments accounted for $15.4 million, $2.6 million and $0.1 million, respectively, of this charge. ThroughDecember 31, 2001, we had expended $11.7 million of the $18.1 million accrual andanticipate expending $5.1 million in 2002 and the balance thereafter. We reinvested thenet savings realized from this plan into improved systems and our workforce.

During the fourth quarter of 2001, we commenced implementation of a plan focused onfurther integration of the international operations and recent acquisitions and the continuedstreamlining of the domestic operations, including the consolidation of certain distributioncenters. As a result of these actions, we recorded a restructuring charge of $8.9 million.The restructuring charge reflects $7.4 million related to estimated employee separationcosts and $1.5 million of exit costs. The charge for employee separation arrangementsrelates to the termination and other severance costs associated with 262 salaried and hourlyemployees severed as part of this plan. The exit costs represent primarily lease cancellationcosts. The domestic distribution and international distribution segments accounted for$4.9 million and $4.0 million, respectively, of this plan charge. Through December 31,2001, we had expended $1.9 million of the $8.9 million accrual and anticipate expending$5.3 million in 2002 and the balance thereafter. Upon completion of this plan, we expecta reduction of approximately $6.0 million in annual pre-tax expenses. Of this amount, weintend to reinvest approximately $3.0 million in our sales and marketing efforts and distri-bution capabilities surrounding our chemical and life sciences product portfolio. As a result,we expect to realize net annual savings of $3.0 million beginning in 2002. During thefourth quarter of 2001 we also reversed $0.8 million of accruals from restructuring chargesrecorded in years prior to 2001 due to actual costs being lower than originally estimated. Thedomestic distribution and international distribution segments accounted for $0.7 millionand $0.1 million of the restructuring credit, respectively.

In connection with the May 2001 stock offering process, we accelerated the vesting ofoptions to purchase approximately 2.3 million shares of common stock having an averageexercise price of $20.85 per share. These options were then converted into the right toreceive approximately 1.0 million shares of common stock, issued and deposited into arabbi trust. The number of shares issued was determined by dividing the “spread” valueof the option (the difference between the last reported sale price on March 30, 2001 of

$35.44, the date of the transaction, and the exercise price of the option) by $35.44. As a result of these transactions we recorded a primarily noncash compensation charge of $33.5 million during the first quarter of 2001.

In 2000, we recorded a restructuring credit of $2.0 million, consisting of a $0.7 millionreversal for our 1999 restructuring charge related to revisions in estimated separationcosts and a $1.3 million reversal for restructuring charges prior to 1999 related to revisedestimates in total costs. The restructuring credit related to our domestic distribution andinternational distribution segments equally.

In 1999, we adopted and commenced implementation of a plan to consolidate and down-size our German business unit, included in our international distribution segment. As aresult of these actions, we recorded a restructuring charge of $2.1 million. The chargerelated to estimated employee separation costs for 22 warehouse, customer service andsales employees. We also recorded a restructuring credit of $3.6 million in 1999 relatedto revisions in estimates for charges recorded prior to 1999.

LOSS FROM OPERATIONS TO BE DISPOSED OF

In December 1998 our Board of Directors approved a plan to dispose of our technologybusiness segment. The disposition was completed through the spinoff of ProcureNet inApril 1999 and the sale of our UniKix Technology software business in July 1999. Theresult of operations of this segment are reported separately in our statement of operations.For the year ended December 31, 1999 loss from operations to be disposed of was $11.3 million that consisted of $6.1 million in operating losses and a $5.2 million write-off of in-process research and development costs associated with an acquisition made inthe first quarter of 1999.

INCOME FROM OPERATIONS

Income from operations decreased 16.1% to $131.1 million in 2001 from $156.3 millionin 2000. Income from operations increased 6.5% to $156.3 million in 2000 from$146.8 million in 1999. Excluding restructuring and other nonrecurring charges of $61.2 million and $8.4 million as described above, income from operations increased16.8% to $192.3 million or 6.7% of sales in 2001 from $164.7 or 6.3% of sales in 2000,respectively. The increase in income from operations as a percent of sales, as adjusted, is primarily due to acquisitions completed in 2001. Excluding restructuring credits andnonrecurring charges of $11.2 million as discussed above, income from operations in 1999was $158.0 million or 6.3% of sales. Income from operations as a percentage of sales, as adjusted, was flat in 2000 compared to 1999 due to a significant decrease in ourlaboratory workstations segment’s operating income in 2000 offset by growth in our basebusiness in the domestic and international distribution segments and the disposal of ourtechnology segment in 1999.



23

Income from operations in the domestic distribution segment increased 15.8% to $173.4 million, or 7.1% of segment sales, for 2001 from $149.8 million, or 6.9% ofsegment sales, in 2000. Domestic distribution income from operations increased 13.7%to $149.8 million in 2000 from $131.8 million, or 6.5% of segment sales, in 1999. Theincrease in income from operations as a percent of sales for the domestic distributionsegment from 2000 to 2001 was primarily related to the acquisitions we completed during2001. We expect income from operations as a percentage of sales to range between 7.7%to 7.9% for 2002 from 7.4% in 2001, as adjusted for the nonamortization of goodwill,due to growth in our base business and the impact of acquisitions completed in 2001.

Approximately 60% of our product deliveries in the United States are through UPS. Thecollective bargaining agreement between UPS and its delivery employees expires on July 31,2002. Although we are implementing plans to mitigate its possible effects, if UPS experi-ences a major work stoppage or slowdown, it would have a material adverse impact on ourresults of operations and cash flows. These effects have not been reflected in our forecasts.

Income from operations in the international distribution segment increased 18.3% to$13.6 million, or 3.2% of segment sales, for 2001 from $11.5 million, or 2.8% of segmentsales, in 2000. International distribution income from operations increased to $11.5 millionin 2000 from $6.3 million, or 1.4% of segment sales, in 1999. We expect income fromoperations as a percentage of sales to range between 4.6% to 4.9% for 2002 from 4.4%in 2001, as adjusted for the nonamortization of goodwill.

Income from operations in the laboratory workstations segment increased 40.0% to $4.9 million, or 2.7% of segment sales, for 2001 from $3.5 million, or 2.1% of segmentsales, in 2000. Laboratory workstations income from operations decreased to $3.5 millionin 2000 from $25.4 million, or 13.2% of segment sales, in 1999. The increase in incomefrom operations from 2000 to 2001 was primarily due to an increase in sales volume. The decrease in income from operations from 1999 to 2000 was primarily related to thedecline in sales volume and gross profit due to a slowdown in the industrial research labo-ratory construction market and a change in product mix. We are forecasting income fromoperations as a percentage of sales to range between 5.3% to 5.6% for 2002 from 4.9%in 2001, as adjusted for the nonamortization of goodwill.

INTEREST EXPENSE

Interest expense for 2001, 2000 and 1999, was $99.5 million, $99.1 million and $104.2 million, respectively. The decrease from 1999 to 2000 was the result of a reductionin the amount of accounts receivables sold through our receivables securitization facility.We expect interest expense for 2002 to decrease from 2001 as a result of principal debtrepayments scheduled for 2002.

OTHER (INCOME) EXPENSE, NET

Other expense decreased to $1.3 million for 2001 from $19.4 million in 2000. Otherexpense increased to $19.4 million in 2000 from income of $15.2 million in 1999. Otherincome in 1999 included a $2.5 million gain on the sale of our UniKix Technology soft-ware business, $6.1 million of gains from the sale of property, plant and equipment and a $3.1 million gain from the portion of our interest rate swap that was undesignated in1999. Other expense in 2000 included a $23.6 million write-down to fair market value ofinvestments in certain Internet-related ventures, primarily ProcureNet, which we spun offin 1999. Other expense in 2001 consists of $6.0 million in equity losses in Global HealthExchange (formerly HealthNexis and The New Health Exchange) and MAS for the periodwe accounted for our investment in MAS under the equity method of accounting; offset by increased interest income earned from proceeds on the May 2001 public offering.

INCOME TAX PROVISION

The income tax provision for 2001 decreased to $13.9 million from $15.1 million in2000. The income tax provision for 2000 decreased to $15.1 million from $34.4 millionin 1999. The effective tax rate was 45.9% for 2001 compared with 40% for 2000. Theeffective tax rate was 40.0% for 2000 compared with 59.5% for 1999. The decrease inthe effective tax rate in 2000 is primarily due to the implementation of domestic andinternational tax-planning initiatives and a reduction in foreign losses for which no taxbenefits are recorded. The increase in the effective tax rate in 2001 results from therestructurings and stock compensation charges recorded that have a U.S. tax benefit ofonly 37%. We anticipate that our effective tax rate will be 34% for 2002. The improve-ment in the effective tax rate is due to recently implemented tax-planning strategies andthe elimination of non-deductible goodwill amortization.

LIQUIDITY AND CAPITAL RESOURCES

For the year ended December 31, 2001, cash generated from operating activities was$158.6 million compared with $107.2 million for 2000. The increase in cash provided by operating activities is due to an increase in net income adjusted for noncash items and an $18.9 million improvement in working capital. Our working capital improvement is primarily attributable to accounts payable, accounts receivable and inventory manage-ment largely due to our continued working capital initiatives. We expect cash flow fromoperations to be $120.0 million to $130.0 million for 2002 reflecting an anticipatedinvestment in working capital due to forecasted growth in our business along with addi-tional cash outflow for the continued integration of Cole-Parmer and the completion of the restructuring plans implemented in 2001.



During 2001, we used $419.6 million of cash for investing activities, compared with $57.1 million in 2000. During 2001 we invested $371.2 million for strategic acquisitions,including $132.7 million for our acquisition of FCS, $208.5 million for our acquisition of Cole-Parmer, and approximately $30 million for the acquisitions of MAS and SEC. The acquisitions were funded with cash on hand, funds provided by our May 2001 offer-ing and through the sale of receivables under the receivables securitization facility. We also invested $6.0 million as a debt investment in MAS and $4.7 million for the Company’sminority interest in Global Health Exchange. As of December 31, 2001, we have fullyfunded our commitment to invest approximately $6.8 million in Global Health Exchange.Capital expenditures totaled $40.1 million in 2001 compared with $29.4 million in 2000.The increase in capital expenditures in 2001 primarily relates to additional investment in infrastructure for our FCS acquisition. We expect to invest between $55.0 million and$65.0 million in capital expenditures for 2002, reflecting continued facility consolidationand increased investment in our chemical manufacturing and pharmaceutical services.We intend to continue pursuing acquisitions of complementary businesses that willenhance our growth and profitability. We currently have no commitment, understanding orarrangement relating to any additional acquisitions.

During 2001, financing activities provided $270.0 million versus cash used by financingactivities of $32.8 million in 2000. In May 2001, we sold 12.8 million shares of commonstock to the public at a price of $24.00 per share. We received proceeds of $289.9 millionfrom the offering net of underwriter’s discounts and offering costs. We used a portion ofthe net proceeds to reduce the amount of accounts receivables sold under our receivablessecuritization facility by $170.0 million and the remainder for acquisitions. Financingactivities in 2000 consisted of scheduled debt service payments. Our debt obligations con-sist of short-term debt of $32.3 million and long-term debt with maturies of $43.4 million in2002, $27.8 million in 2003, $65.0 million in 2004, $249.1 million in 2005, $3.4 millionin 2006 and $616.0 million thereafter.

We have a $175 million revolving credit facility that bears interest at LIBOR plus 1.25%to 2.25% or Prime Rate plus 0.25% to 1.25% (the “Revolving Facility”.) We also pay a commitment fee of 50 basis points per annum of the undrawn portion of the RevolvingFacility. At December 31, 2001 we had $123.7 million of available borrowing capacityunder our Revolving Facility, net of $51.3 million of letters of credit outstanding, primarilyrepresenting guarantees issued to local banks in support of borrowings by our foreign sub-sidiaries. The Revolving Facility expires in January 2004. We also maintain a $170 millionreceivables securitization facility (the “Receivables Securitization”). Our ReceivablesSecuritization provides for the sale, on a revolving basis, of certain of our accounts receivable.The Receivables Securitization facility bears interest at LIBOR plus an annual commitmentfee of 50 basis points. The Receivables Securitization expires in January 2003. The fullamount of the Receivables Securitization facility was available at December 31, 2001.

We expect to satisfy our short-term funding requirements from free operating cash flow,together with cash and cash equivalents on hand. A change in demand for the Company’s goodsand services, while unlikely, would reduce free operating cash flow available to fund ouroperations. If such a decrease in demand were significant and free operating cash flow werereduced significantly, we may utilize the unused portion of our Receivables Securitizationfacility to the extent that we have qualified receivables to sell through the facility. Further,we have borrowing capacity available under our Revolving Facility. We believe that thesefunding sources are sufficient to meet our ongoing operating, capital expenditure and debtservice requirements for at least the next twelve months. Cash requirements for periodsbeyond the next twelve months depend on our profitability, our ability to manage workingcapital requirements and our growth rate. We may seek to raise additional funds frompublic or private debt or equity financings, or from other sources for general corporatepurposes or for the acquisition of businesses or products. There can be no assurance thatadditional funds will be available at all or that, if available, will be obtained at termsfavorable to us. Additional financing could also be dilutive.

CRITICAL ACCOUNTING POLICIES

The discussion and analysis of our financial condition and results of operations are basedon our consolidated financial statements, which have been prepared in accordance withaccounting principles generally accepted in the United States of America. The preparationof these financial statements requires us to make estimates and assumptions that affectthe reported amounts of assets and liabilities and the disclosure of contingent assets andliabilities at the date of the financial statements and the reported amounts of revenuesand expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to product returns, bad debts, inven-tory obsolescence, investments, intangible assets, income taxes, warranty obligations,restructuring costs, retirement and insurance costs, and contingencies and litigation. Thoseestimates and assumptions are based on our historical experience, our observance of trendsin the industry, and various other factors that are believed to be reasonable under thecircumstances; the results of which form the basis for making judgments about the carry-ing values of assets and liabilities that are not readily apparent from other sources. Actualresults may differ from these estimates under different assumptions or conditions.

We recognize revenue for product sales upon the transfer of all risks and rewards ofownership to the buyer. We also record reductions to revenue for estimated returns. Shoulda greater amount of products be returned to us, additional reductions to revenue may berequired. We also provide for the estimated cost of product warranties at the time revenueis recognized. Although our facilities undergo quality assurance and testing proceduresthroughout the production process and we monitor our suppliers for Fisher branded products,our warranty obligation is affected by product failure rates, material usage and servicedelivery costs incurred in correcting a product failure. Should actual product failure rates,material usage or service delivery costs differ from our estimates, revisions to the estimatedwarranty liability may be required.



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We maintain an allowance for doubtful accounts for estimated losses resulting from theinability of our customers to make required payments. We provide for the allowance fordoubtful accounts when it becomes likely and known that the financial condition of ourcustomer deteriorated, resulting in their inability to make payments. If those conditionschange, changes to the allowance for doubtful accounts may be necessary.

We write down our inventory for estimated obsolescence to the difference between the costof inventory and the estimated market value based upon assumptions about future demandand market conditions. Future demand is generally forecasted for a 12-month period. Ifactual future demand or market conditions are less favorable than those projected by man-agement, additional inventory write-downs may be required.

We record accruals for environmental liabilities, based on current interpretations of envi-ronmental laws and regulations when it is probable that a liability has been incurred andthe amount can be reasonably estimated. Our estimates are based upon reports preparedby environmental specialists and management’s knowledge and experiences with theseenvironmental matters. If interpretations of applicable laws and regulations, cleanup methodsor the extent of our responsibility change from our current estimates, revisions to ourestimated environmental liability may be required.

Although we consider these policies to require management’s more complex estimatesand assumptions, you may refer to Note 3 – Summary of Significant Accounting Policiesfor a description of our accounting policies necessary for a complete understanding of ourfinancial statements.

EUROPEAN ECONOMIC AND MONETARY UNION

We conduct business in many of the 12 countries that are participating in the EuropeanEconomic and Monetary Union that, among other things, adopted a single currency calledthe euro. On January 1, 1999, a three-year transition period for the euro began and theconversion rates between the euro and the national currencies were fixed. Business enter-prises had the option of switching to the single currency at any time prior to January 1,2002. In connection with our upgrade of management information systems for Year 2000purposes, we incorporated the necessary changes to conduct business in euros and thenational currencies during the transition period and entirely in euros thereafter. We werenot able to estimate or segregate the costs relating to the conversion to the euro, but wedo not believe that such costs were material. Conversion to the euro has not had a materialimpact on our results of operations.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board (“FASB”) issued Statement ofFinancial Accounting Standards No. 141, “Business Combinations” (“SFAS 141”) andStatement of Financial Accounting Standards No. 142, “Goodwill and Other IntangibleAssets” (“SFAS 142”).

SFAS 141 requires the purchase method of accounting for business combinations initiatedafter June 30, 2001 and eliminated the pooling-of-interests method for business combi-nations. SFAS 141 also specifies the types of acquired intangible assets that are requiredto be recognized and reported separately from goodwill and those acquired intangibleassets that are required to be included in goodwill. Under the provisions of SFAS 141,goodwill and intangible assets determined to have an indefinite useful life that are acquiredin a business combination completed after June 30, 2001 were not amortized. Goodwill and intangible assets acquired in business combinations completed prior to July 1, 2001continued to be amortized through December 31, 2001.

SFAS 142 requires the use of a nonamortization approach to account for purchased good-will and certain intangibles. Under the nonamortization approach, goodwill and certainintangibles will not be amortized but instead would be reviewed for impairment and writtendown with a resulting charge to operations only in the period in which the recorded valueof goodwill and certain intangibles is more than its fair value. SFAS 142 requires us toperform an evaluation of whether goodwill and indefinite-lived intangible assets areimpaired as of January 1, 2002, the effective date of the statement for us. Additionally,SFAS 142 requires us to reassess the useful lives and residual values of all intangibleassets and make any necessary amortization adjustments. This impairment evaluation is required to be completed by March 31, 2002 for indefinite-lived intangible assets and by December 31, 2002 for goodwill.

At December 31, 2001, we had unamortized goodwill and indefinite-lived intangibleassets in the amount of $507.4 million and $61.5 million, respectively, all of which issubject to the transition provisions of SFAS 141 and SFAS 142. We are in the process ofevaluating the effect that the transitional goodwill impairment provisions of this statementwill have on our financial statements.



In August 2001, the FASB issued Statement of Financial Accounting Standards No. 143,“Accounting For Asset Retirement Obligations” (“SFAS 143”). SFAS 143 addresses finan-cial accounting and reporting for obligations associated with the retirement of tangiblelong-lived assets and the associated asset retirement costs. SFAS 143 applies to legalobligations associated with the retirement of long-lived assets that result from the acqui-sition, construction, development and/or the normal operation of a long-lived asset, exceptfor certain obligations of lessees. This standard requires entities to record the fair value of a liability for an asset retirement obligation in the period incurred. We do not anticipatethe adoption of SFAS 143 as of January 1, 2003, will have a material effect on our finan-cial position or results of operations.

In October 2001, the FASB issued Statement of Financial Accounting Standards No.144,“Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS144”). SFAS 144addresses financial accounting and reporting for the impairment or disposal of long-livedassets. This statement supersedes FASB Statement No.121, “Accounting for the Impairmentof Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,” and the accountingand reporting provisions of APB Opinion No. 30, “Reporting the Results of Operations –Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual andInfrequently Occurring Events and Transactions.” This statement also amends ARB No. 51,“Consolidated Financial Statements,” to eliminate the exception to consolidation for a sub-sidiary for which control is likely to be temporary. This statement broadens the presentationof discontinued operations to include more disposal transactions. The provisions of thisstatement have been adopted as of January 1, 2002 and will be applied prospectively.

CONTROL OF THE COMPANY

On January 21, 1998, approximately 87% of the fully diluted shares of common stock ofFisher were converted into the right to receive $9.65 per share in cash pursuant to mergeragreement dated November 14, 1997, as amended between us and FSI Merger Corp. (“FSI”),a Delaware corporation formed by Thomas H. Lee Company (“THL”), providing for themerger of FSI with and into Fisher and the recapitalization of Fisher (collectively the“Recapitalization”). The Recapitalization established an election process that providedstockholders the right to elect, subject to proration, for each share of Fisher common stockheld, to either receive $9.65 in cash or retain one share of common stock, $0.01 par valuein the recapitalized company.

As of March 2002, certain affiliates of THL (“THL Entities”), JP Morgan Partners (BHCA)(“JP Morgan”), Merrill Lynch & Co. (“Merrill Lynch”) and Credit Suisse First Boston(USA), Inc. formerly known as Donaldson, Lufkin and Jenrette, Inc. (“CSFB” and, togetherwith the THL Entities, JP Morgan and Merrill Lynch, the “Equity Investors”) own 46.1% of our issued and outstanding common stock, with the THL Entities owning 29.5% ofsuch outstanding stock. Accordingly, the Equity Investors have significant control over us and have the power to elect a majority of our directors, appoint new management andapprove any action requiring the approval of the holders of our common stock, includingadopting amendments to our certificate of incorporation and approving mergers or sales of substantially all of our assets. These Equity Investors and certain members of manage-ment entered into an Investor’s Agreement dated January 21, 1998, as amended (the“Investor’s Agreement”). The Investor’s Agreement provides that our Board of Directorswill comprise at least nine, but not more than ten directors, four of whom will be appointedby the THL Entities, one of whom will be appointed by DLJ Merchant Banking Partners II,L.P., one of whom will be Mr. Paul M. Montrone and one of whom will be Mr. Paul M. Meister.The directors elected pursuant to the Investor’s Agreement will have the authority to makedecisions affecting our capital structure, including the issuance of additional capital stock,the implementation of stock repurchase programs and the declaration of dividends. Therecan be no assurance that the interests of the Equity Investors will not conflict with theinterests of our other shareholders.

CAUTIONARY FACTORS REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report includes forward-looking statements. All statements other than state-ments of historical facts included in this Annual Report may constitute forward-lookingstatements. We have based these forward-looking statements on our current expectationsand projections about future events. Although we believe that our assumptions made inconnection with the forward-looking statements are reasonable, there can be no assur-ances that the assumptions and expectations will prove to have been correct. Theseforward-looking statements are subject to various risks, uncertainties and assumptionsincluding, among other things:

– our outstanding indebtedness and leverage, and the restrictions imposed by ourindebtedness;

– the effects of domestic and international economic and business conditions on ourbusinesses;

– the high degree of competition of certain of our businesses, and the potential for newcompetitors to enter into these businesses;

– the extent to which we undertake new acquisitions or enter into strategic joint venturesor partnerships;

– future modifications to existing laws and regulations affecting the environment;–discovery of unknown contingent liabilities, including environmental contamination

at our facilities and liability with respect to products we distribute and manufacture;



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–fluctuations in interest rates and in foreign currency exchange rates;–availability, or increases in the cost, of raw materials and other inputs used to make

our products;– the loss of major customers or suppliers; and–our ability to generate free cash flow or to obtain sufficient resources to finance working

capital and capital expenditure needs.

Words such as “anticipates,” “estimates,” “expects,” “projects,” “intends,” “plans,” “believes”and words and terms of similar substance used in connection with any discussion of futureoperating results or financial performance identify forward-looking statements. All forward-looking statements reflect management’s present expectations of future events and aresubject to a number of important factors and uncertainties that could cause actual resultsto differ materially from those described in the forward-looking statements.

You are cautioned not to place undue reliance on the forward-looking statements, whichspeak only as of the date of this Annual Report. The Company is under no obligation, andexpressly disclaims any obligation, to update or alter any forward-looking statements, whetheras a result of new information, future events or otherwise.

For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in Section 27A of the Securities Act.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We operate manufacturing and logistical facilities as well as offices around the world andutilize fixed and floating rate debt to finance global operations. As a result, we are subjectto business risks inherent in non-U.S. activities, including political and economic uncer-tainty, import and export limitations, and market risk related to changes in interest ratesand foreign currency exchange rates. We believe the political and economic risks relatedto foreign operations are mitigated due to the stability of the countries in which ourlargest foreign operations are located.

In the normal course of business, we use derivative financial instruments, including inter-est rate swaps and foreign currency forward exchange contracts to manage market risks.Additional information regarding our financial instruments is contained in Note 6 – FairValue of Financial Instruments and Note 12 – Debt. The objective in managing our exposureto changes in interest rates is to limit the impact of these changes on earnings and cashflow and to lower our overall borrowing costs. The objective in managing our exposure tochanges in foreign currency exchange rates is to reduce volatility on earnings and cash flowassociated with these changes. Our principal currency exposures are in the major Europeancurrencies and in the Canadian dollar. We do not hold derivatives for trading purposes.

We measure our market risk related to our holdings of financial instruments based onchanges in interest rates and foreign currency rates utilizing a sensitivity analysis. Thesensitivity analysis measures the potential loss in fair values, cash flows and earningsbased on a hypothetical 10% change in interest and currency exchange rates. We usedyear-end market rates on our financial instruments to perform the sensitivity analysis. We do not include items such as lease contracts, insurance contracts, and obligations forpension and other postretirement benefits in the analysis.

Our primary interest rate exposures relate to cash, fixed and variable rate debt and interestrate swaps. The potential loss in fair values is based on an immediate change in the netpresent values of our interest rate sensitive exposures resulting from a 10% change in inter-est rates. The potential loss in cash flows and earnings is based on the change in the netinterest income/expense over a one-year period due to an immediate 10% change in rates.A hypothetical 10% change in interest rates would not have had a material impact on ourfair values, cash flows or earnings for either 2001 or 2000.

Our primary currency rate exposures are to our intercompany debt, cash and foreigncurrency forward contracts. The potential loss in fair values is based on an immediatechange in the U.S. dollar equivalent balances of our currency exposures due to a 10% shiftin exchange rates. The potential loss in cash flows and earnings is based on the change in cash flow and earnings over a one-year period resulting from an immediate 10% changein currency exchange rates. A hypothetical 10% change in the currency exchange rateswould not have had a material impact on the fair values, cash flows or earnings for either2001 or 2000.


STATEMENT OF OPERATIONS


Year Ended December 31, 2001 2000 1999

(in millions, except per share data)

Sales $2,880.0 $2,622.3 $2,514.5Cost of sales 2,142.8 1,974.0 1,885.4Selling, general and administrative expense 546.4 494.0 472.5Restructuring and other charges (credits) 59.7 (2.0) (1.5)Loss from operations to be disposed of – – 11.3

Income from operations 131.1 156.3 146.8Interest expense 99.5 99.1 104.2Other (income) expense, net 1.3 19.4 (15.2)

Income before income taxes 30.3 37.8 57.8Income tax provision 13.9 15.1 34.4

Net income $ 16.4 $ 22.7 $ 23.4

Net income per common share:Basic $ 0.33 $ 0.57 $ 0.59

Diluted $ 0.31 $ 0.51 $ 0.55

Weighted average common shares outstanding:Basic 49.4 40.1 40.0

Diluted 53.0 44.4 42.8

See the accompanying notes to financial statements.


BALANCE SHEET

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December 31, 2001 2000

(in millions, except share data)

ASSETSCurrent assets:

Cash and cash equivalents $ 75.1 $ 66.0Accounts receivable, net 332.0 296.8Inventories 261.4 224.2Other current assets 89.3 63.6

Total current assets 757.8 650.6Property, plant and equipment 322.1 251.3Goodwill 507.4 334.2Other assets 251.9 149.6

Total assets $1,839.2 $1,385.7

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)Current liabilities:

Short-term debt $ 75.7 $ 47.6Accounts payable 336.1 308.5Accrued and other current liabilities 225.9 151.7

Total current liabilities 637.7 507.8Long-term debt 956.1 991.1Other liabilities 222.1 198.5

Total liabilities 1,815.9 1,697.4

Commitments and contingenciesStockholders’ equity (deficit):

Preferred stock ($0.01 par value; 15,000,000 shares authorized, none outstanding) – –Common stock ($0.01 par value; 500,000,000 shares authorized; 54,194,484

and 40,132,296 shares issued; and 54,157,878 and 40,116,389 shares outstanding, at December 31, 2001 and 2000, respectively) 0.5 0.4

Capital in excess of par value 661.1 326.0Accumulated deficit (555.5) (571.9)Accumulated other comprehensive loss (81.8) (65.9)Treasury stock, at cost, (36,606 and 15,907 shares at December 31, 2001

and 2000, respectively) (1.0) (0.3)

Total stockholders’ equity (deficit) 23.3 (311.7)

Total liabilities and stockholders’ equity (deficit) $1,839.2 $1,385.7



STATEMENT OF CASH FLOWS



(in millions)

Cash flows from operating activities:Net income $ 16.4 $ 22.7 $ 23.4Adjustments to reconcile net income to cash provided by operating activities:

Restructuring and other charges (credits), net of cash expended 46.1 (2.0) (1.5)Depreciation and amortization 82.0 63.6 62.4Write down of investments – 23.6 –Other noncash expenses 6.0 6.3 1.5(Gain) loss on sale of property, plant and equipment and write-offs (0.6) 0.6 (8.0)Deferred income taxes (0.3) 2.3 20.5Changes in working capital:

Accounts receivables, net 8.9 6.8 2.0Inventories 10.0 5.9 (4.0)Accounts payable 13.8 2.8 60.7Other working capital 4.5 1.4 (21.8)

Net cash flow from operations to be disposed of – – 2.6Other assets and liabilities (28.2) (26.8) (13.1)

Cash provided by operating activities 158.6 107.2 124.7Cash flows from investing activities:

Acquisitions, net of cash acquired (371.2) (23.1) (34.4)Capital expenditures (40.1) (29.4) (41.1)Proceeds from sale of property, plant and equipment 2.4 1.7 16.0Other investments (10.7) (6.3) (3.0)

Cash used in investing activities (419.6) (57.1) (62.5)Cash flows from financing activities:

Proceeds from sale of common stock 289.9 – –Long-term debt proceeds – 8.1 9.1Long-term debt payments (29.5) (20.9) (10.1)Change in short-term debt, net 7.2 1.3 10.2Proceeds from stock options exercised 3.1 0.4 0.3Acquisition of treasury stock (0.7) – (0.1)Changes in amounts sold under the accounts receivable securitization, net – (21.7) (83.5)

Cash provided by (used in) financing activities 270.0 (32.8) (74.1)Effect of exchange rate changes on cash 0.1 (1.6) (3.4)Net change in cash and cash equivalents 9.1 15.7 (15.3)Cash and cash equivalents – beginning of year 66.0 50.3 65.6Cash and cash equivalents – end of year $ 75.1 $ 66.0 $ 50.3Supplemental cash flow information:

Cash paid during the year for:Income taxes, net of refunds $ 8.5 $ 1.8 $ 16.0Interest $ 92.2 $ 93.2 $ 97.7



STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) AND OTHER COMPREHENSIVE INCOME (LOSS)

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Accumulated OtherCapital in Shares Shares to be Retained Other Comprehensive

Common Excess of Deposited Distributed Earnings Comprehensive Treasury IncomeStock Par Value in Trust from Trust (Deficit) Income (Loss) Stock Total (Loss)

(in millions)

Balance at January 1, 1999 $0.4 $313.3 $(29.8) $29.8 $(618.2) $(19.7) $(0.5) $(324.7)Net income – – – – 23.4 – – 23.4 $ 23.4Foreign currency translation adjustment – – – – – (32.4) – (32.4) (32.4)Minimum pension liability – – – – – 0.5 – 0.5 0.5

Subtotal – other comprehensive loss $ (8.5)Proceeds from stock options – 0.3 – – – – – 0.3Compensation related to the grant of stock options – 2.2 – – – – – 2.2Distribution of ProcureNet to stockholders – – – – 0.2 – – 0.2Trust activity – – (0.1) 0.1 – – – –Acquisition of treasury stock – – – – – – (0.1) (0.1)

Balance at December 31, 1999 0.4 315.8 (29.9) 29.9 (594.6) (51.6) (0.6) (330.6)Net income – – – – 22.7 – – 22.7 $ 22.7Foreign currency translation adjustment – – – – – (14.3) – (14.3) (14.3)Unrealized investment gain – – – – – 0.3 – 0.3 0.3Minimum pension liability – – – – – (0.3) – (0.3) (0.3)

Subtotal – other comprehensive income $ 8.4Proceeds from stock options – 0.4 – – – – – 0.4Tax benefit from stock options – 0.3 – – – – – 0.3Compensation related to the grant of stock options – 5.0 – – – – – 5.0Expiration of put (See Note 18) – 4.5 – – – – – 4.5Trust activity – – (0.2) 0.2 – – – –Issuance of treasury stock – – – – – – 0.3 0.3

Balance at December 31, 2000 0.4 326.0 (30.1) 30.1 (571.9) (65.9) (0.3) (311.7)Net income – – – – 16.4 – – 16.4 $ 16.4Foreign currency translation adjustment – – – – – (10.1) – (10.1) (10.1)Unrealized investment gain – – – – – 0.5 – 0.5 0.5Unrealized loss on cash flow hedges – – – – – (6.6) – (6.6) (6.6)Minimum pension liability – – – – – 0.3 – 0.3 0.3

Subtotal – other comprehensive income $ 0.5Proceeds from issuance of common stock, net 0.1 289.8 – – – – – 289.9Proceeds from stock options – 3.1 – – – – – 3.1Tax benefit from stock options – 8.7 – – – – – 8.7Conversion of employee stock options to common stock – 33.5 – – – – – 33.5Acquisition of treasury stock – – – – – – (0.7) (0.7)Trust activity (See Notes 2 and 19) – – (20.5) 20.5 – – – –

Balance at December 31, 2001 $0.5 $661.1 $(50.6) $50.6 $(555.5) $(81.8) $(1.0) $ 23.3



NOTES TO FINANCIAL STATEMENTS


NOTE 1 | FORMATION AND BACKGROUND

Fisher Scientific International Inc. (“Fisher” or the “Company”) was incorporated inSeptember 1991. The Company’s operations are conducted throughout North and SouthAmerica, Europe, the Far East, the Middle East and Africa directly or through one or moresubsidiaries, joint ventures, agents, or dealers. The Company reports financial results onthe basis of three business segments: domestic distribution, international distribution,and laboratory workstations. The domestic distribution segment engages in the supply,marketing, service and manufacture of scientific, clinical, educational, and occupationalhealth and safety products. Additionally, this segment provides contract manufacturingand pharmaceutical packaging services. The international distribution segment engagesin the supply, marketing and service of primarily scientific research products. The labora-tory workstations segment manufactures laboratory workstations, fume hoods and enclosuresfor technology and communication centers. Until 1999, Fisher operated a fourthsegment, technology.

The Company serves scientists engaged in biomedical, biotechnology, pharmaceutical,chemical and other fields of research and development, and is a supplier to clinicallaboratories, hospitals, healthcare alliances, physicians’ offices, environmental testingcenters, remediation companies, quality-control laboratories and many other customers.

NOTE 2 | PUBLIC OFFERING OF COMMON STOCK

On May 9, 2001, the Company sold 12.8 million shares of common stock to the public at a price of $24.00 per share. An additional 1.0 million shares were sold by employeesand other individuals from shares distributed from a rabbi trust set up in connection withthe Company’s recapitalization in 1998 to meet tax obligations triggered by the offering.Proceeds to the Company from the offering were approximately $289.9 million, net of underwriters’ discounts and offering costs. The Company did not receive any proceedsfor the sale of shares by the selling stockholders.

NOTE 3 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation –The financial statements contain the accounts of theCompany and all majority-owned subsidiaries. Intercompany accounts and transactionsare eliminated.

Cash and Cash Equivalents – Cash and cash equivalents consist primarily of highly liquidinvestments with insignificant interest rate risk and original maturities of three months or less at the date of acquisition.

Inventories – Inventories are valued at the lower of cost or market, cost being determinedprincipally by the last-in, first-out (“LIFO”) method for the majority of the subsidiariesincluded in the domestic distribution segment and by the first-in, first-out (“FIFO”)method for all other subsidiaries.

Property, Plant and Equipment – Property, plant and equipment is recorded at cost and isgenerally depreciated based upon the following estimated useful lives: buildings and improve-ments 5 to 33 years and machinery, equipment and other 3 to 12 years. Depreciation iscomputed using the straight-line method. Depreciation expense for 2001, 2000 and 1999was $43.5 million, $33.3 million and $30.4 million, respectively.

Goodwill – Goodwill acquired in a business combination completed prior to June 30, 2001is being amortized on a straight-line basis over 5 to 40 years. Goodwill acquired in a busi-ness combination completed after June 30, 2001 is not being amortized. The amountspresented are net of accumulated amortization of $99.1 million and $83.1 million atDecember 31, 2001 and 2000, respectively.

Intangible Assets – Intangible assets with a finite useful life and intangible assets with anindefinite useful life acquired in a business combination completed prior to June 30, 2001are being amortized on a straight-line basis over their estimated useful lives, ranging upto 20 years. Intangible assets with an indefinite useful life acquired in a business combi-nation completed after June 30, 2001 are not being amortized. Net intangible assets of$106.9 million and $24.6 million at December 31, 2001 and 2000 are included in OtherAssets and are stated net of accumulated amortization of $24.2 million and $21.3 million,respectively. During 2001, 2000 and 1999, the Company recorded amortization expenseof $3.1 million, $3.0 million and $3.2 million, respectively.


33

Impairment of Long-Lived Assets – Impairment losses are recorded on long-lived assetsused in operations when indicators of impairment are present and the quoted marketprice, if available, or the anticipated undiscounted operating cash flow generated by thoseassets are less than the assets’ carrying value. An impairment charge is recorded for thedifference between the fair value and carrying value of the asset.

Advertising –The Company expenses advertising costs as incurred, except for certaindirect-response advertising, which is capitalized and amortized over its expected period offuture benefit, generally two years. Direct-response advertising consists of catalog produc-tion and mailing costs that are amortized from the date catalogs are mailed. Advertisingexpenses, including internal employment costs for marketing personnel and amortization ofcapitalized direct-response advertising, were $21.8 million, $20.1 million and $23.5 millionfor the three years ended December 31, 2001, 2000 and 1999, respectively.

Revenue Recognition –The Company recognizes product revenue upon the transfer of all risks and rewards of ownership to the buyer. Products are generally delivered withoutsignificant post-sale obligations to customers. If a significant obligation exists, revenuerecognition is deferred until the obligations are satisfied. Service revenue is recognized as the services are performed.

Deferred Debt Issue Costs – Deferred debt issue costs of $23.5 million and $27.6 millionat December 31, 2001 and 2000, respectively, relate to the Company’s 9% Notes, 71⁄8%Notes and Credit Facility debt. Deferred debt issue costs are included in Other Assets and are amortized using the effective interest rate method over the term of the related debt.During 2001, 2000, and 1999, the Company recorded amortization expense of $5.0 million,$4.6 million and $4.4 million, respectively.

Income Taxes –The Company uses the asset and liability approach to account for incometaxes by recognizing deferred tax assets and liabilities for the expected future tax conse-quences of temporary differences between the carrying amounts and the tax basis ofassets and liabilities. The Company records a valuation allowance to reduce the deferredtax assets to the amount that is more likely than not expected to be realized.

Other (Income) Expense, net – Other (income) expense, net consists of interest income oncash and cash equivalents and other non-operating income and expense items. The 2000amount includes a $23.6 million write-down of the Company’s Internet-related invest-ments and 1999 includes $7.8 million of gains on asset sales.

Stock-Based Compensation –The Company measures compensation expense for its stock-based employee compensation plans using the intrinsic value method, and has provided,in Note 18 – Stock and Other Plans, the pro forma disclosures of the effect on net incomeand earnings per common share as if the fair value based method had been applied inmeasuring compensation expense.

Foreign Currency Translation –Assets and liabilities of the Company’s foreign subsidiaries,where the functional currency is the local currency, are translated into U.S. dollars usingyear-end exchange rates. Revenues and expenses of foreign subsidiaries are translated atthe average exchange rates in effect during the year. Adjustments resulting from financialstatement translations are included as a separate component of stockholders’ equity(deficit). Gains and losses resulting from foreign currency transactions are reported on the income statement line item “other (income) expense, net,” when recognized.

Financial Instruments – Effective January 1, 2001, the Company adopted Statement ofFinancial Accounting Standards No. 133, “Accounting for Derivative Instruments andHedging Activities” (“SFAS 133”), as amended, which established accounting and report-ing standards for derivative instruments, including certain derivative instruments embeddedin other contracts and for hedging activities. All derivatives, whether designated in hedgingrelations or not, are recorded on the balance sheet at fair value. If the derivative is desig-nated as a fair value hedge, the changes in the fair value of the derivative and of the hedgeditem attributable to the hedged risk are recognized in earnings. If the derivative is desig-nated as a cash flow hedge, the effective portions of changes in the fair value of thederivative are recorded in accumulated other comprehensive income (OCI) and are recog-nized in the income statement when the hedged item affects earnings. Ineffective portions of changes in the fair value of cash flow hedges are recognized in earnings. For derivativeinstruments not designated as hedging instruments, changes in fair value are recognizedin earnings in the current period. The adoption of SFAS 133, as amended, did not have a material effect on the Company’s financial position or results of operations.

The nature of the Company’s business activities necessarily involves the management ofvarious financial and market risks, including those related to changes in interest rates andforeign currency exchange rates. As discussed below, the Company uses derivative financialinstruments to mitigate or eliminate certain of those risks. The Company assesses, both atthe inception of the hedge and on an ongoing basis, whether the derivatives that are usedin hedging transactions are highly effective in offsetting changes in cash flows of hedgeitems. When it is determined that a derivative is not highly effective as a hedge, the Companydiscontinues hedge accounting prospectively. The Company does not hold derivatives fortrading purposes.



The Company enters into interest rate swap agreements in order to manage its exposure tointerest rate risk. These interest rate swaps are designated as cash flow hedges of theCompany’s variable rate debt. During 2001, no ineffectiveness was recognized in thestatement of operations on these hedges. Amounts accumulated in OCI are reclassifiedinto earnings as interest is accrued on the hedge transactions. The amounts accumulatedin OCI will fluctuate based on changes in the fair value of the Company’s derivatives ateach reporting period.

The Company enters into forward currency contracts to hedge exposure to fluctuations inforeign currency rates. For foreign currency contracts that are designated hedges, changesin the fair value are recorded in OCI to the extent of hedge effectiveness and are subse-quently recognized in earnings once the forecasted transactions are recognized. For forwardcurrency contracts not designated as hedges, changes in fair value are recognized in other(income) expense, net.

Other Comprehensive Income (Loss) – Other comprehensive income (loss) refers torevenues, expenses, gains and losses that under accounting principles generally acceptedin the United States of America are included in other comprehensive income (loss) butare excluded from net income (loss) as these amounts are recorded directly as an adjust-ment to stockholders’ equity (deficit), net of tax. The Company’s other comprehensiveincome (loss) is composed of unrealized gains and losses on available-for-sale securities,unrealized losses on cash flow hedges, minimum pension liability and foreign currencytranslation adjustments.

Use of Estimates –The preparation of financial statements in conformity with accountingprinciples generally accepted in the United States of America requires management tomake estimates and assumptions that affect the reported amounts of assets and liabilitiesand disclosure of contingent assets and liabilities at the date of the financial statementsand the reported amounts of revenues and expenses during the reporting period. Actualresults could differ from those estimates.

Reclassifications – Certain prior year amounts have been reclassified to conform to theircurrent presentation.

NOTE 4 | ACQUISITIONS

In February 2001, the Company acquired the pharmaceutical packaging services businessof Covance which we renamed Fisher Clinical Services Inc. (“FCS”). FCS enables phar-maceutical and biotechnology customers to outsource packaging, labeling and distributionfor new medicines undergoing phase 3 and phase 4 clinical trials. The Company paid anadjusted purchase price of $132.7 million in a cash transaction. The results of FCS havebeen included in the domestic distribution segment from the date of acquisition.

In June 2001, the Company acquired a controlling interest in Medical Analysis Systems,Inc. (“MAS”) after having acquired a non-controlling interest in March 2001. MAS is aleading manufacturer of controls and reagents for the clinical laboratory market. Prior toJune 2001, the Company accounted for its investment in MAS using the equity method of accounting. In July 2001, the Company acquired Safety Equipment Company (“SEC”),a distributor of safety supplies and personal protection equipment. These acquisitionshad an aggregate purchase price of approximately $30 million. The results of MAS andSEC have been included in the domestic distribution segment from their respective datesof acquisition.

In November 2001, the Company acquired Cole-Parmer Instrument Company and its affili-ated companies (“Cole-Parmer”). Cole-Parmer is a leading worldwide manufacturer anddistributor of specialty technical instruments, appliances, equipment and supplies. Thepurchase price was $208.5 million in cash. The results of Cole-Parmer have been includedin the domestic distribution segment from the date of acquisition.

The following table summarizes the estimated fair values of the assets acquired andliabilities assumed at the date of the acquisitions. The allocation of purchase price hasbeen made based upon management estimates and third-party valuations that have notbeen finalized. Accordingly, the allocation of purchase price is preliminary.

(in millions)

Current assets $ 94.0Property, plant and equipment 77.2Intangible assets 89.0Goodwill 192.5Other assets 24.0

Total assets acquired 476.7

Current liabilities 86.0Long-term debt 3.8Other liabilities 15.7

Total liabilities assumed 105.5

Net assets acquired $371.2



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The following unaudited pro forma financial information presents the consolidated resultsof operations as if the acquisitions described above had occurred at the beginning of 2001and 2000 (in millions, except per share amounts). The unaudited pro forma amountsinclude a financing charge to reflect estimated borrowing costs that would have been incurredhad the acquisitions occurred at the beginning of 2000. The unaudited pro forma financialinformation is provided for informational purposes only and does not purport to be indica-tive of the Company’s results of operations that would actually have been achieved had theacquisitions been completed for the periods presented, or that may be obtained in the future.

2001 2000

Sales $3,063.5 $2,939.6Net income 7.7 15.0Net income per common share:

Basic $0.15 $0.37Diluted 0.14 0.34

In January 2000, the Company acquired a diagnostic manufacturing business based inMiddletown, Virginia, for $22.3 million in cash. The results of this business have beenincluded in the domestic distribution segment from the date of acquisition. In January 1999,the Company acquired Columbia Diagnostics Inc., a Virginia-based provider of laboratoryproducts and supplies to the healthcare industry, which is included in the domestic distri-bution segment, and Structured Computer Systems (“SCS”), a Connecticut-based providerof procurement and materials management solutions to businesses, which was included in the ProcureNet business of the former technology segment. Fisher recorded a $5.2 millionwrite-off for in-process research and development costs related to the acquisition of SCS.Net cash consideration paid for acquisitions during 1999, including the remaining 10% of an entity acquired in 1998, was approximately $34.4 million.

NOTE 5 | OPERATIONS TO BE DISPOSED OF

In December 1998, the Company’s Board of Directors approved a plan to dispose of theCompany’s technology business segment through (i) a spinoff (the “Spinoff”) of ProcureNetInc. (“ProcureNet”), the Company’s outsourcing and supply chain management technologybusiness, and (ii) the sale of UniKix Technology software business. As part of the Spinoff,which was consummated on April 15, 1999, the Company and ProcureNet entered into atransitional services agreement pursuant to which Fisher provides ProcureNet with certainmanagement and other administrative services.

During the first quarter of 1999, ProcureNet entered into debt obligations to Fisher totaling$19 million. These notes bear interest at an annual rate of 9% and are due and payableon December 31, 2007. Subsequent to the Spinoff, the Company fulfilled its credit com-mitment to ProcureNet by providing an additional $3 million in debt securities on termssimilar to those of the existing notes. In accordance with the terms of the securities and at the option of ProcureNet, accrued interest of $1.1 million and $1.7 million was converted to principal during 2000 and 1999, respectively. In the fourth quarter of 2000, the Companyrecorded an impairment charge of $19.4 million in other (income) expense to write downa portion of the outstanding principal of the ProcureNet debt security. The charge wastriggered primarily by market conditions that adversely impacted ProcureNet’s cash flows.The remaining balance of $5.4 million was based upon management’s estimate of the fairvalue of this debt security at December 31, 2000. The fair value of the debt security wasdetermined based upon a valuation of the business using a discounted cash flow model.

On July 22, 1999, the Company completed the sale of UniKix for cash proceeds of approxi-mately $5 million. A gain on the sale of $2.5 million was recognized and is included inother (income) expense, net.

Revenues, costs and expenses, and cash flows of the former technology segment have beenexcluded from their respective captions in the statement of operations and statement ofcash flows. These items have been reported as “loss from operations to be disposed of” and“net cash flows from operations to be disposed of” for the year ended December 31, 1999.

The former technology segment, which includes the results of operations of ProcureNetthrough April 15, 1999 and UniKix through July 22, 1999, had net sales of $21.1 millionand incurred a net loss of $11.3 million during 1999. The operating loss in 1999 includesa $5.2 million write-off for in-process research and development costs related to theacquisition of SCS.




NOTE 6 | FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company’s financial instruments consist primarily of cash in banks, accounts receiv-ables, debt, interest rate swaps and forward foreign currency contracts.

The carrying amounts for cash and cash equivalents, accounts receivables, and short-termdebt approximate fair value due to the short-term nature of these instruments. The carryingand fair values of long-term debt were $956.1 million and $978.6 million, respectively, atDecember 31, 2001, and $991.1 million and $951.1 million, respectively, at December 31,2000. The fair value of the long-term fixed rate debt was estimated based on current quotesfrom bond traders making a market in the debt instrument. The fair value of debt withvariable rates approximates the net carrying value. At December 31, 2001, the Companyhad no outstanding forward foreign currency contracts and at December 31, 2000, hadoutstanding forward foreign currency contracts with notional amounts of approximately $5 million. The fair value of these contracts was insignificant at December 31, 2000. TheCompany also had off-balance-sheet standby letters of credit with notional amounts of$54.2 million and $56.8 million with no unrealized gain or loss at December 31, 2001 and2000, respectively.

At December 31, 2001, the Company was a party to five interest-rate swap agreements in which the Company exchanged its floating-rate obligation on (a) $40.0 million denomi-nated in U.S. dollars for a fixed-rate payment obligation of 5.669% per annum throughJanuary 21, 2004, (b) $141.9 million denominated in U.S. dollars for a fixed rate obliga-tion of 5.669% per annum through December 31, 2003, (c) $22.0 million denominatedin British pounds for a fixed-rate payment obligation of 5.850% per annum throughJanuary 21, 2004, and (d) $7.9 million denominated in Canadian dollars for a fixed-ratepayment obligation of 5.6675% per annum through January 21, 2004. The notionalamount of each interest-rate swap agreement matches the repayment schedule of theTerm Facility through the maturity date of the respective interest rate swap agreements(see Note 12 – Debt). In the unlikely event that the counterparty fails to meet the terms of the interest-rate swap agreement, the Company’s exposure is limited to the interest-ratedifferential on the notional amount at each quarterly settlement period over the life of theagreements. The Company does not anticipate nonperformance by the counterparty. Thefair values of interest-rate swap agreements are the estimated amounts that the Companywould pay or receive to terminate the agreements at the reporting date, taking into accountcurrent interest rates, the market expectation for future interest rates and the currentcreditworthiness of the Company. The fair value of outstanding interest-rate swap agree-ments as of December 31, 2001 and 2000, based upon quoted market prices, reflectedan unrealized loss of $9.6 million and an unrealized gain of $0.6 million, respectively.

None of the Company’s financial instruments represents a concentration of credit risk asthe Company deals with a variety of major banks worldwide, and its accounts receivableare spread among a number of customers and geographic areas.

NOTE 7 | ACCOUNTS RECEIVABLE

The following is a summary of accounts receivable at December 31 (in millions):

2001 2000

Gross accounts receivable $366.8 $331.8Allowance for doubtful accounts (34.8) (35.0)

Accounts receivable, net $332.0 $296.8

The Company’s receivables securities facility (“Receivables Securitization”) provides for the sale, on a revolving basis, of certain of the accounts receivable of Fisher ScientificInternational Inc., a Delaware limited liability corporation (“FSII”), to a special purpose,bankruptcy remote subsidiary of FSII included in the Company’s consolidated financialstatements. The parties have entered into an agreement to transfer, on a revolving basis,an undivided percentage ownership interest in a designated pool of accounts receivableup to a maximum amount based on a defined calculated percentage of the outstandingaccounts receivable balance. As collections reduce accounts receivable included in thepool, new receivables are sold into the pool. During 2001, the Company collected andreinvested, on a revolving basis, approximately $812 million of receivables. During 2000,the Company collected and reinvested, on a revolving basis, approximately $475 millionof receivables and used $21.7 million of additional collections to reduce this facility tozero at December 31, 2000. The special purpose subsidiary has the risk of credit loss onthe receivables and, accordingly, the full amount of the allowance for doubtful accountshas been retained in the Company’s balance sheet. Under the terms of the ReceivablesSecuritization, FSII retains collection and administrative responsibilities for the receiv-ables in the pool. Due to the short-term nature of the receivables, the Company’s retainedinterest in the pool during the year is valued at historical cost which approximates fairvalue. The facility expires in January 2003 and the effective interest rate is approximatelyone month LIBOR plus an annual commitment fee of 50 basis points. The Companyrecorded $3.8 million and $3.9 million of losses on the sale of receivables as interestexpense in the year ended December 31, 2001 and 2000, respectively. The full amountof the Receivables Securitization facility was available at December 31, 2001 and 2000.


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NOTE 8 | INVENTORIES

The following is a summary of inventories by major category at December 31 (in millions):

2001 2000

Raw material $ 33.6 $ 28.8Work in process 11.0 6.9Finished products 216.8 188.5

Total $261.4 $224.2

Inventories valued using the LIFO method amounted to $150.9 million and $149.3million at December 31, 2001 and 2000, respectively, which were below estimatedreplacement cost by approximately $30.8 million and $26.7 million for the years endedDecember 31, 2001 and 2000, respectively.

NOTE 9 | OTHER CURRENT ASSETS

The following is a summary of other current assets at December 31 (in millions):

2001 2000

Deferred income taxes $60.8 $48.5Other 28.5 15.1

Total $89.3 $63.6

NOTE 10 | PROPERTY, PLANT AND EQUIPMENT

The following is a summary of property, plant and equipment by major class of asset atDecember 31 (in millions):

2001 2000

Land, buildings and improvements $ 239.3 $ 185.8Machinery, equipment and other 290.9 241.0

Total 530.2 426.8 Accumulated depreciation (208.1) (175.5)

Property, plant and equipment, net $ 322.1 $ 251.3

NOTE 11 | ACCRUED AND OTHER CURRENT LIABILITIES

The following is a summary of accrued and other current liabilities at December 31 (in millions):

2001 2000

Wages and benefits $ 61.0 $ 32.6Interest 25.7 24.4Other 139.2 94.7

Total $225.9 $151.7

NOTE 12 | DEBT

The following is a summary of debt obligations at December 31 (in millions):

2001 2000

9% Senior Subordinated Notes (net of a discount of $4.6 million and $5.4 million in 2001 and 2000, respectively) $595.4 $594.6

Term Facility 211.8 231.271⁄8% Notes (net of a discount of

$0.6 million and $0.7 million in 2001 and 2000, respectively) 149.4 149.3

Other 75.2 63.6Less short-term debt (75.7) (47.6)

Total long-term debt $956.1 $991.1




The Term Facility consists of (a) a $69.9 million tranche A term loan (“Tranche A”), (b) a $84.2 million tranche B term loan (“Tranche B”) and (c) a $57.7 million tranche Cterm loan (“Tranche C”). Of the $211.8 million outstanding under the Term Facility,$181.9 million is denominated in U.S. dollars, $22.0 million is denominated in Britishpounds and $7.9 million is denominated in Canadian dollars. Borrowings under the TermFacility and the Company’s $175 million revolving credit facility (the “Revolving Facility”and together with the Term Facility the “Credit Facility”) bear interest at a range of rates,based upon the Company’s leverage ratio, equal to, at the Company’s option, the follow-ing: Tranche A and Revolving Facility, LIBOR plus 1.25% to 2.25% or Prime Rate plus0.25% to 1.25%; Tranche B, LIBOR plus 2.25% to 2.50% or Prime Rate plus 1.25% to 1.50%; and Tranche C, LIBOR plus 2.50% to 2.75% or Prime Rate plus 1.50% to 1.75%.The Company also pays a commitment fee equal to 0.50% per annum of the undrawnportion of each lender’s commitment. Interest rates at December 31, 2001 were asfollows: Tranche A – 3.13% (LIBOR plus 1.25%); Tranche B – 4.13% (LIBOR plus 2.25%);and Tranche C – 4.38% (LIBOR plus 2.50%). The Revolving Facility expires in January 2004.The mandatory repayment schedule of the Term Facility is as follows: $30.5 million in2002, $22.3 million in 2003, $62.7 million in 2004, and $96.3 million in 2005.

The obligations of Fisher and the subsidiary borrowers under the Credit Facility aresecured by substantially all assets of the Company and its material domestic subsidiaries.The obligations of Fisher and the subsidiary borrowers are further guaranteed by Fisherand each material domestic subsidiary of Fisher.

The Credit Facility contains covenants of the Company and the subsidiary borrowers,including, without limitation, certain financial covenants and restrictions on (i) indebted-ness, (ii) the sale of assets, (iii) mergers, acquisitions and other business combinations,(iv) minority investments, and (v) the payment of cash dividends to shareholders. Thefinancial covenants include requirements to maintain certain levels of interest coverage,debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”), mini-mum EBITDA and a limit on capital expenditures. The Company is in compliance with all covenants at December 31, 2001. Loans under the Term Facility are required to be prepaid with 50% of excess cash flow (as defined in the Credit Facility and subject to certain limits as specified therein), certain equity issuances of the Company, 100% of net-cash proceeds of certain asset sales, certain insurance and condemnation proceeds,and certain debt issuances of the Company.

On January 21, and November 20, 1998, the Company issued $400 million and $200 mil-lion, respectively, of 9% Senior Subordinated Notes. The 9% Senior Subordinated Notesissued in January were issued at par while the 9% Senior Subordinated Notes issued in November were issued net of an approximate $7 million discount. The 9% SeniorSubordinated Notes will mature on February 1, 2008 with interest payable semiannuallyin arrears on February 1 and August 1 of each year. The 9% Notes are unsecured seniorsubordinated obligations of the Company, subordinated in right of payment to all existingand future senior indebtedness and rank pari passu in light of payment with all otherexisting and future senior subordinated indebtedness of the Company. The 9% Notes areredeemable at the option of the Company at any time after February 1, 2003 at an initialredemption price of 104.5%, declining ratably to par on or after February 1, 2006. Upona Change of Control Triggering Event (as defined in the Indenture under which the 9%Notes are issued), the Company will be required to make an offer to purchase all out-standing 9% Notes at 101% of the principal amount thereof, together with accrued andunpaid interest, if any, to the date of purchase.

The Indenture under which the 9% Notes are issued contains covenants that restrict,among other things, (i) the ability of the Company and its subsidiaries to incur additionalindebtedness, (ii) pay dividends or make certain other restricted payments, (iii) merge orconsolidate with any other person, and (iv) make minority investments, and contains othervarious covenants that are customary for transactions of this type.

The Company also has outstanding $150.0 million aggregate principal amount of 71⁄8%Notes due December 15, 2005, which were sold on December 18, 1995 at a price to thepublic equal to 99.184% of principal bringing the effective interest rate to 7.5%.

Other debt outstanding at December 31, 2001 totaled $75.2 million, of which $42.9 millionis long-term in nature. This debt matures as follows: $12.9 million in 2002, $5.5 million in2003, $2.3 million in 2004, $2.8 million in 2005, $3.4 million in 2006, and $16.0 millionthereafter.


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NOTE 13 | COMMITMENTS AND CONTINGENCIES

The Company leases certain logistics, office and manufacturing facilities. The following isa summary of annual future minimum lease and rental commitments under operating leasesas of December 31, 2001 (in millions):

2002 $ 24.02003 18.72004 14.52005 13.32006 12.2Thereafter 72.0

Net minimum lease payments $154.7

Total rental expense included in the accompanying statement of operations amounted to$20.5 million in 2001, $17.6 million in 2000, and $18.4 million in 1999.

At December 31, 2001, the Company had letters of credit outstanding totaling $54.2 million,which primarily represent guarantees issued to local banks in support of borrowings byforeign subsidiaries of the Company, guarantees with respect to various insurance activitiesas well as performance letters of credit issued in the normal course of business.

There are various lawsuits and claims pending against the Company involving contract,product liability and other issues. In addition, the Company has assumed certain insur-ance liabilities, including liabilities related to an inactive insurance subsidiary, primarilyrelated to certain historical businesses of its former parent, including those related toworkers’ compensation, employers’ liability, automobile, general and product liability. In view of the Company’s financial condition and the accruals established for relatedmatters, based on management’s knowledge to date, management does not believe thatthe ultimate liability, if any, related to these matters will have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

The Company is currently involved in various stages of investigation and remediationrelated to environmental protection matters. The Company cannot predict the potentialcosts related to environmental matters and the possible impact on future operations giventhe uncertainties regarding the extent of the required cleanup, the complexity and inter-pretation of applicable laws and regulations, the varying costs of alternative cleanup methods and the extent of the Company’s responsibility. However, these costs could bematerial. The Company records accruals for environmental liabilities based on currentinterpretations of environmental laws and regulations, when it is probable that a liabilityhas been incurred and the amount of such liability can be reasonably estimated. TheCompany calculates estimates based upon reports prepared by environmental specialistsand management’s knowledge and experience with these environmental matters. TheCompany includes in these estimates potential costs for investigation, remediation, andoperation and maintenance of cleanup sites. Accrued liabilities for environmental matterswere $29.8 million and $31.0 million at December 31, 2001 and 2000, respectively.

Although these amounts do not include third-party recoveries, the Company may be sub-ject to indemnification from third parties for liabilities relating to certain sites. Managementbelieves this accrual is adequate for the environmental liabilities the Company expects to incur. As a result, the Company believes that the ultimate liability with respect to envi-ronmental matters will not have a material adverse effect on the Company’s financialposition, results of operations or cash flows. However, the Company may be subject toadditional remedial or compliance costs due to future events, such as changes in existinglaws and regulations, changes in agency direction or enforcement policies, developmentsin remediation technologies or changes in the conduct of the Company’s operations, whichcould have a material adverse effect on the Company’s financial position, results of oper-ations or cash flows.

NOTE 14 | STOCKHOLDERS’ EQUITY (DEFICIT)

The preferred stock and the common stock of the Company are each issuable in one ormore series or classes, any or all of which may have such voting powers, full or limited, orno voting powers, and such designations, preferences and related participating, optionalor other special rights and qualifications, limitations or restrictions thereof, as are setforth in the Restated Certificate of Incorporation of Fisher or any amendment thereto, orin the resolution or resolutions providing for the issue of such stock adopted by Fisher’sBoard of Directors, which is expressly authorized to set such terms for any such issue. At December 31, 2001, the Company’s outstanding common stock included 4,035,290of nonvoting shares. As of December 31, 2001, there were warrants outstanding to purchase2,583,315 shares of common stock at a per share exercise price of $9.65.




On May 16, 2001, the stockholders of the Company approved an amendment to theRestated Certificate of Incorporation of the Company increasing the authorized number of shares of common stock that may be issued from 100,000,000 to 500,000,000.

NOTE 15 | EARNINGS PER SHARE

Net income per share is computed under Statement of Financial Accounting StandardsNo. 128, “Earnings Per Share.” Basic net income per share is computed by dividing netincome available for common stockholders by the weighted average number of shares ofcommon stock outstanding during the period. Diluted net income per share is computedby dividing net income available for common stockholders by the weighted average numberof shares of common stock outstanding, including potential common shares from conver-sion of stock options and warrants using the treasury stock method, if dilutive.

The following table sets forth basic and diluted net income per share computational datafor the periods presented (in millions, except per share amounts):


Net income available to common shareholders $16.4 $22.7 $23.4

Weighted average common shares outstanding used in computing basic net income per share 49.4 40.1 40.0

Common stock equivalent (a) 3.6 4.3 2.8

Weighted average common shares outstanding used in computing diluted net income per share 53.0 44.4 42.8

Basic net income per share $0.33 $0.57 $0.59Diluted net income per share $0.31 $0.51 $0.55

(a)The weighted average amount of outstanding antidilutive common stock options and warrants excludedfrom the computation of diluted net income per share was 0.9 million, 0.2 million and 1.6 million atDecember 31, 2001, 2000 and 1999, respectively.

NOTE 16 | INCOME TAXES

The domestic and foreign components of income before income taxes are as follows (in millions):


Domestic $ 0.6 $25.6 $44.1Foreign 29.7 12.2 13.7

Income before income taxes $30.3 $37.8 $57.8

The components of the income tax provision are as follows (in millions):


Current income tax expense:Federal $ – $ 5.7 $ 8.9State 1.5 0.4 (1.0)Foreign 12.7 6.7 6.0

Total current 14.2 12.8 13.9

Deferred income tax expense (benefit):Federal 0.6 1.5 8.3State (0.3) 0.1 6.5Foreign (0.6) 0.7 5.7

Total deferred (0.3) 2.3 20.5

Total income tax provision $13.9 $15.1 $34.4


41

The principal items accounting for the differences in taxes on income computed at theapplicable U.S. statutory rate and as recorded are as follows (in millions):


Taxes computed at statutory rate $10.6 $13.2 $20.2Foreign taxes over (under) U.S. rate and

foreign losses not tax benefitted (net) (1.2) 0.4 4.8State income taxes (net of federal benefit) 1.7 0.3 3.5Nondeductible permanent items, net 2.8 2.4 6.0Other – (1.2) (0.1)

Income tax provision $13.9 $15.1 $34.4

The tax effects of temporary items that gave rise to significant portions of the deferred taxaccounts are as follows at December 31 (in millions):

2001 2000

Deferred tax assets:Postretirement benefit costs other than pension $ 24.4 $ 26.0Environmental accruals 11.8 12.2Operating loss 53.3 34.4Accrued employee benefits 35.3 28.5Restructuring accruals 7.2 3.8Other items not deductible until paid 55.6 48.3

Gross deferred tax assets 187.6 153.2Less valuation allowance (35.7) (26.3)

Total deferred tax assets 151.9 126.9

Deferred tax liabilities:Goodwill 22.4 20.9Property, plant and equipment 12.4 11.4Other 9.6 7.8

Total deferred tax liabilities 44.4 40.1

Net deferred tax assets $107.5 $ 86.8

Deferred tax assets include the benefit of net operating loss carryforwards subject toappropriate valuation allowances. The Company evaluates the tax benefits of operatingloss carryforwards on an ongoing basis taking into consideration such factors as the futurereversals of existing taxable temporary differences, projected future operating results, theavailable carryforward period and other circumstances. At December 31, 2001, theCompany had accumulated net operating loss carryforwards for tax purposes expiring asfollows (in millions):

Foreign State Federal

2002 $ 1.8 $ – $ –2003 1.7 2.4 –2004 1.8 4.2 –2005 – 3.5 –2006 – 3.7 –2008 2.5 8.1 –2009 0.1 12.0 –2010 0.2 – –2011 2.4 0.1 –2013 – 3.9 –2014 – 6.3 –2016 – 0.1 –2018 – 13.3 –2019 – 18.9 17.82021 – 1.0 10.9No Expiration 89.2 – –

Total $99.7 $77.5 $28.7




SFAS No. 109 requires that deferred tax assets be reduced by a valuation allowance if itis more likely than not that some portion or all of the deferred tax asset will not be real-ized. The valuation allowances at December 31, 2001, 2000 and 1999 predominantlyrepresent allowances against foreign net operating losses which are not anticipated toresult in future tax benefits.

Undistributed earnings of the Company’s foreign subsidiaries amounted to approximately$53 million at December 31, 2001. Upon distribution of those earnings in the form ofdividends or otherwise, the Company would be subject to both U.S. income taxes (subjectto an adjustment for foreign tax credits) and withholding taxes payable to the variousforeign countries. The Company intends to periodically make distributions from its foreignsubsidiaries to its U.S. parent. These distributions will only be made at such time thatthey are deemed to be tax efficient. The Company does not anticipate any additional U.S.tax liability above that which has previously been recorded.

NOTE 17 | RETIREMENT BENEFITS

The Company has defined benefit pension plans available to substantially all employeesthat are either fully paid for by the Company or provide for mandatory employee contribu-tions as a condition of participation. Under the cash balance plan in the United States, a participating employee accumulates a cash balance account which is credited monthlywith an allocation equal to 3.5% of compensation and interest. The Company’s fundingpolicy is to contribute annually the statutorily required minimum amount as actuariallydetermined.

The Company, generally at its own discretion, provides a postretirement health careprogram that is administered by the Company to employees who elect to and are eligibleto participate. Fisher funds a portion of the costs of this program on a self-insured andinsured-premium basis and, for the years ended December 31, 2001, 2000 and 1999,made payments totaling $1.8 million, $2.1 million and $1.7 million, respectively.

The changes in benefit obligations and plan assets were as follows at December 31 (in millions):

OtherPostretirement

Pension Benefits Benefits

2001 2000 2001 2000

Change in benefit obligationBenefit obligation at beginning of year $244.5 $238.6 $24.0 $26.9

Service costs 10.7 9.0 0.4 0.4Interest costs 17.0 16.4 1.6 1.6Plan participants’ contribution 0.6 0.7 – –Plan amendment – 0.1 – (1.8)Actuarial (gain) loss 6.5 0.4 (0.9) (0.6)Benefits paid (17.1) (17.2) (1.8) (2.1)Currency translation adjustment (1.6) (3.5) (0.1) (0.4)

Benefit obligation at end of year $260.6 $244.5 $23.2 $24.0


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Pension Benefits

2001 2000

Change in plan assetsFair value of plan assets at beginning of year $317.8 $276.9

Actual return on plan assets (40.6) 59.5Employer contribution 1.6 2.1Plan participants’ contribution 0.6 0.7Benefits paid (17.1) (17.2)Currency translation adjustment (2.3) (4.2)

Fair value of plan assets at end of year $260.0 $317.8

The funded status of the Company’s pension and postretirement programs was as followsat December 31 (in millions):

OtherPostretirement

Pension Benefits Benefits

2001 2000 2001 2000

Funded status $(0.6) $ 73.3 $(23.2) $(24.0)Unrecognized net actuarial (gain) loss 9.3 (65.5) (28.2) (28.8)Unrecognized prior service costs (4.6) (5.1) (9.2) (11.4)Unrecognized net transition obligation 0.2 0.1 – –Adjustment required to recognize

minimum liability (2.4) (3.0) – –

Accrued benefit asset (liability) $ 1.9 $ (0.2) $(60.6) $(64.2)

The net periodic pension costs and postretirement health care benefit income includesthe following components for the years ended December 31 (in millions):

Other Pension Benefits Postretirement Benefits

2001 2000 1999 2001 2000 1999

Components of net periodic benefit cost (income)

Service cost $ 10.7 $ 9.0 $ 9.5 $ 0.4 $ 0.4 $ 0.4Interest cost 17.0 16.4 15.1 1.6 1.6 1.8Expected return

on plan assets (25.6) (23.2) (21.2) – – –Amortization of

unrecognized net (gain) loss 0.2 – 0.2 (2.2) (2.4) (2.1)

Amortization of unrecognized prior service cost (0.5) (0.6) (0.6) (2.2) (2.2) (2.1)

Amortization of unrecognized net transitionasset (0.1) (0.8) (0.9) – – –

Recognized net actuarial (gain) loss (0.3) – – 0.6 – –

Settlement/curtailment (gain) loss (1.8) (1.0) – – – 0.1

Net periodic benefit (income) cost $ (0.4) $ (0.2) $ 2.1 $(1.8) $(2.6) $(1.9)

In 1993, the Company amended certain of its existing postretirement health care programscreating an unrecognized prior service benefit. The unrecognized prior service benefit isbeing amortized over approximately 13 years.




The development of the net periodic pension cost and the projected benefit obligationwas based upon the following assumptions:

2001 2000 1999

Discount rate 7.25% 7.50% 7.50%Average rate of increase in employee compensation 4.00% 4.00% 4.00%Expected long-term rate of return on assets 9.75% 9.75% 9.75%

The date used to measure plan assets and liabilities was October 31 in each year. Planassets are invested primarily in stocks, bonds, short-term securities and cash equivalents.

The weighted average discount rate used in determining the accumulated postretirementhealth care benefit obligation was 7.25% for December 31, 2001 and 7.5% for December 31,2000 and 1999, respectively. A 7.75% annual rate of increase in per capita cost of coveredhealth care benefits was assumed for 2001 which gradually decreases to an average ulti-mate rate of 7.25%. Because of limitations on the Company’s contributions under theamended health care program, changes in the health care trend rate assumption do nothave a significant effect on the amounts reported. To illustrate, a change in the assumedhealth care cost trend rate by 1 percentage point effective January 2001 would change theaccumulated postretirement benefit obligation as of December 31, 2001 by approximately$0.6 million and the aggregate of the service and interest cost components of net periodicpostretirement benefit cost for the year ended December 31, 2001 by approximately $0.1 million.

The Company also maintains a defined contribution savings and profit sharing plan (the“Plan”). The Plan allows eligible employees to participate after six months and 500 hoursof service. Participants may elect to contribute between 1% and 15% of their annualcompensation as defined in the Plan. The Company is obligated to contribute an amountequal to 25% of each employee’s basic contribution, as defined, and may, at the discretionof the Company, contribute additional amounts. For the years ended December 31, 2001,2000 and 1999 the Company’s contributions to the Plan were $3.8 million, $4.1 millionand $4.2 million, respectively.

NOTE 18 | STOCK AND OTHER PLANS

Stock PlansIn May of 2001 the Board of Directors approved and adopted the Fisher 2001 Equity and Incentive Plan (“2001 Plan”). Under the 2001 Plan, the Company may grant up to8,000,000 shares of common stock. Awards under the 2001 Plan may be made in theform of incentive stock options, non-qualified stock options, other stock based awards,including but not limited to restricted stock units or dividend payments. No more than3,000,000 shares of common stock may be awarded in respect to options, restrictedstock, restricted stock units or other stock-based awards to any individual under the 2001 Plan. Options granted have a term of ten years and generally vest over three years.The exercise price of any option will not be granted at less than the fair market value of the common stock on the date of the grant.

Under the Company’s 1998 Equity and Incentive Plan (“1998 Plan”), the Company may grant up to an aggregate of 10,000,000 shares of stock. At December 31, 2001,5,721,000 shares are available for grant. Awards under the 1998 Plan were authorized to be made in the form of options (whether incentive or otherwise), stock appreciationrights, restricted stock, dividend equivalents and other stock-based awards. Optionsgranted have a term of ten years and generally vest either over a three to five year periodin equal installments or in one installment nine years from the date of grant, unlesssooner vested upon the achievement of certain performance targets and other factors. The Company has also granted options to purchase 758,333 shares of Common Stockhaving a ten year term and vesting five to nine years from the date of grant, unless sooner vested upon the achievement of certain performance targets or unless “put” to the Company by the executive or “called” by the Company in accordance with the termsof the respective grant agreements. The total “put” and/or “call” rights are limited to$14.5 million plus interest, of which $4.5 million expired during 2000 in accordancewith the terms of the option agreement and was reclassified from other liabilities to equity.Options have generally been granted at fair market value. The exercise price of all optionsoutstanding on April 15, 1999 was reduced by $0.15 per share as a result of the Spinoff of ProcureNet (see Note 5 – Operations To Be Disposed Of). During 2000, the Companyrecorded a noncash compensation expense of $3.7 million in selling, general and admin-istrative expense relating to a one-time change in the terms of certain stock options.


45

A summary of the status of the Company’s stock option plans at December 31, 2001, 2000,and 1999 and changes during the years then ended is presented in the following table:

2001 2000 1999

Weighted Weighted WeightedAverage Average Average

Shares Exercise Shares Exercise Shares Exercise(000) Price (000) Price (000) Price

Outstanding at beginning of year 7,393 $15.68 6,950 $14.07 7,269 $14.47

Granted 3,253 26.38 920 28.73 523 19.03Exercised (309) 10.71 (36) 9.64 (23) 9.64Canceled/Expired/

Forfeited (2,750) 21.08 (441) 16.46 (819) 19.61

Outstanding at end of year 7,587 $18.45 7,393 $15.68 6,950 $14.07

Exercisable at end of year 4,034 $11.54 2,500 $10.73 1,103 $ 9.68

Weighted average fair value of options granted $13.16 $ 9.27 $ 5.04

The following table summarizes information about stock options outstanding at December 31, 2001.

Options Outstanding Options Exercisable

Weighted Average Weighted Weighted

Number Remaining Average Number AverageRange of Outstanding Contractual Exercise Exercisable Exercise

Exercise Price (000) Life Price (000) Price

$ 7.00 – $11.00 3,383 6.1 $ 9.50 3,383 $ 9.5011.01 – 15.00 74 6.6 12.84 74 12.8415.01 – 18.00 174 6.9 17.44 174 17.4418.01 – 22.00 301 8.0 20.58 152 20.6222.01 – 26.00 2,087 9.2 24.07 124 24.3426.01 – 30.00 1,377 8.7 29.72 – –31.01 – 34.00 126 8.7 32.73 86 32.3934.01 – 38.00 64 6.1 36.76 40 36.9138.01 – 42.00 1 8.2 42.00 1 42.00

7,587 4,034

Restricted Unit PlanPursuant to the restricted unit plan of Fisher, each non-employee director of the Companyreceived a one-time grant of 25,000 units upon becoming a director of the Company. The units represent the right to receive an equivalent number of shares of common stockupon separation from service as a member of the Board of Directors, subject to certainrestrictions. The units are subject to certain transfer restrictions for a specified periodduring which the director has the right to receive dividends. The units vest 25% for eachyear of service. Unvested units are generally forfeited if the director ceases to be a non-employee director prior to the end of the restricted period.




SFAS 123 Pro Forma DisclosuresHad compensation cost for options been based upon fair value determined under SFASNo. 123, the Company’s 2001, 2000 and 1999 net income would have been $31.3 million,$20.4 million, and $20.3 million, respectively, with basic earnings per share of $0.63 for2001 and of $0.51 for both 2000 and 1999, and diluted earnings per share of $0.59, $0.46and $0.47, for 2001, 2000 and 1999, respectively. The fair value of each option grant isestimated on the date of grant using a Black-Scholes option pricing model with the follow-ing weighted average assumptions used for grants in 2001, 2000 and 1999: risk-freeinterest rates of approximately 4.5%, 6.0% and 6.6%, respectively, annual dividend of$0; expected lives of 5 years and expected volatility of 51%, 55% and 48%, respectively.

NOTE 19 | RESTRUCTURING AND OTHER CHARGES

During the first quarter of 2001, Fisher adopted and commenced implementation of a streamlining plan (the “First Quarter Plan”) aimed at improving operations, largelythrough office, warehouse and manufacturing facility consolidations and the discontin-uance of certain product lines. As a result of these actions, the Company recorded arestructuring charge of $18.1 million. The restructuring charge reflects $10.9 millionrelated to estimated employee separation costs and $7.2 million of exit costs. The chargefor employee separation arrangements relates to the termination and other severance costsassociated with 518 salaried and hourly employees severed as part of this plan. The exitcosts represent primarily lease-cancellation costs and costs associated with the discontin-uance of certain product lines.

During the fourth quarter of 2001, Fisher commenced implementation of a plan focusedon further integration of the international operations and recent acquisitions and thecontinued streamlining of the domestic operations, including the consolidation of certaindistribution centers (the “Fourth Quarter Plan”). As a result of these actions, the Companyrecorded a restructuring charge of $8.9 million. The restructuring charge reflects $7.4 mil-lion related to estimated employee separation costs and $1.5 million of exit costs. Thecharge for employee separation arrangements relates to the termination and other sever-ance costs associated with 262 salaried and hourly employees severed as part of thisplan. The exit costs represent primarily lease-cancellation costs. During the fourth quarterof 2001 the Company also reversed $0.8 million of excess accruals remaining from restruc-turing charges recorded in years prior to 2001.

The following table summarizes the recorded accruals and activity related to the FirstQuarter Plan and Fourth Quarter Plan (collectively the “2001 Plan”) (in millions):

Employee OtherSeparations Exit Costs Total

2001 PlanRestructuring charge $18.3 $8.7 $27.0Less cash payments 8.7 4.6 13.3Less noncash items – 0.3 0.3

Balance as of December 31, 2001 $ 9.6 $3.8 $13.4

In connection with the May 2001 stock offering process, the Company accelerated thevesting of options to purchase approximately 2.3 million shares of common stock havingan average exercise price of $20.85 per share. These options were then converted intothe right to receive approximately 1.0 million shares of common stock, issued and depositedinto a rabbi trust. The number of shares issued was determined by dividing the “spread”value of the option (the difference between the last reported sale price on March 30, 2001of $35.44, the date of the transaction, and the exercise price of the option) by $35.44.As a result of these transactions the Company recorded a primarily noncash compensationcharge of $33.5 million during the first quarter of 2001.

In 2000, the Company recorded a restructuring credit of $2.0 million for the reversal ofprior year restructuring accruals due to actual costs being lower than originally estimated.The restructuring credit related to the domestic distribution and international distributionsegments equally.

In 1999, the Company recorded a $1.5 million net restructuring credit, which consistedof a $2.1 million restructuring charge related to its long-term restructuring plan and a $3.6 million reversal of prior period restructuring charges due to revised estimates. The charge reflected consolidation and downsizing of the Company’s German operations,which are included in the international distribution segment. The charge resulted from a plan that was adopted in December 1999. The charge related to severance and relatedcosts for the termination of 22 warehouse, customer service, and sales employees. AtDecember 31, 2001, no balance remains accrued for this restructuring plan. The $3.6 millionreversal of prior period restructuring charges was comprised of a $3.0 million reduction of severance due to organizational changes and voluntary separations that occurred during1999 which were not anticipated in prior periods and a $0.6 million reduction due torevised estimates for the closing of logistics centers in the United States.


47

Income from operations is revenue less related direct and allocated expenses. Externalcustomer sales of the domestic distribution segment were $2,281 million, $2,045 million and$1,882 million for 2001, 2000 and 1999, respectively. Intercompany sales and transfersbetween segments were not material for 2001, 2000 or 1999.

The domestic distribution, international distribution and laboratory workstations segmentsaccounted for $19.6 million, $6.5 million and $0.1 million, respectively, of the 2001restructuring and other charges. In addition, the Company accelerated the vesting of com-mon stock options and recorded a primarily noncash compensation charge of $33.5 millionin 2001 not allocated by segment.

Assets Capital Expenditures Depreciation and Amortization

2001 2000 1999 2001 2000 1999 2001 2000 1999

Domestic distribution $1,331.7 $ 848.4 $ 787.2 $30.1 $19.4 $22.9 $55.7 $38.2 $36.6International distribution 340.7 375.1 438.4 5.3 4.9 12.8 17.0 16.5 16.9Laboratory workstations 166.8 162.2 177.0 4.7 5.1 5.0 9.3 8.9 8.9Technology – – – – – 0.4 – – –

Total $1,839.2 $1,385.7 $1,402.6 $40.1 $29.4 $41.1 $82.0 $63.6 $62.4

NOTE 20 | SEGMENT AND GEOGRAPHICAL FINANCIAL INFORMATION

The Company reports financial results on the basis of three business segments: domesticdistribution, international distribution and laboratory workstations. The domestic distribu-tion segment engages in the supply, marketing, service and manufacture of scientific, clinical,

educational, and occupational health and safety products. Additionally, this segmentprovides contract manufacturing and pharmaceutical packaging services. The internationaldistribution segment engages in the supply, marketing and service of primarily scientificresearch products. The laboratory workstations segment manufactures laboratory work-stations, fume hoods and enclosures for technology and communication centers. Until1999, the Company operated a fourth segment, technology.

Selected business segment financial information for the years ended December 31, 2001, 2000 and 1999 is shown below (in millions):

Sales Income from Operations

2001 2000 1999 2001 2000 1999

Domestic distribution $2,439.9 $2,187.3 $2,015.4 $173.4 $149.8 $131.8International distribution 425.4 418.5 446.9 13.6 11.5 6.3Laboratory workstations 178.6 165.2 192.0 4.9 3.5 25.4Technology – – – – – (6.1)Eliminations (163.9) (148.7) (139.8) 0.4 (0.1) 0.6

Segment subtotal 2,880.0 2,622.3 2,514.5 192.3 164.7 158.0Restructuring and other charges (credits) – – – 59.7 (2.0) (1.5)Nonrecurring charges – – – 1.5 10.4 12.7

Total $2,880.0 $2,622.3 $2,514.5 $131.1 $156.3 $146.8




The Company operates or sells to customers in approximately 145 countries outside the United States. Sales outside the United States comprised 17%, 19%, and 21% ofconsolidated sales in 2001, 2000, and 1999, respectively. No single foreign countryaccounted for more than 10% of consolidated sales during the past three years.

Long-Lived Assets

2001 2000

Long-lived assets by geographic area:Domestic $768.7 $427.6International 167.7 182.5

Total $936.4 $610.1

Fisher’s product portfolio is comprised of consumable products, such as laboratorysupplies and specialty chemicals, and durables. Approximately 80% of 2001, 2000, and 1999 sales were of consumable products and 20% of 2001, 2000, and 1999 saleswere of durable products.

NOTE 21 | RELATED PARTIES

The Company pays an annual management fee of $1.0 million to certain affiliates of THL.In return for the annual management fee, THL, and certain of its affiliates, provide con-sulting and management advisory services. Several of the Company’s equity investors wereunderwriters to the Company’s May 2001 offering for which the Company paid approximately$9.9 million in underwriters discounts from the proceeds of the offering. One of the Company’sequity investors is a financial institution that provides financing to the Company.

NOTE 22 | ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board (FASB) issued Statement ofFinancial Accounting Standards No. 141, “Business Combinations” (“SFAS 141”) andStatement of Financial Accounting Standards No. 142, “Goodwill and Other IntangibleAssets” (“SFAS 142”).

SFAS 141 requires the purchase method of accounting for business combinations initiatedafter June 30, 2001 and eliminates the pooling-of-interests method for business combi-nations. SFAS 141 also specifies the types of acquired intangible assets that are requiredto be recognized and reported separately from goodwill and those acquired intangible

assets that are required to be included in goodwill. Under the provisions of SFAS 141,goodwill and intangible assets determined to have an indefinite useful life that are acquiredin a business combination completed after June 30, 2001 were not amortized. Goodwill and intangible assets acquired in business combinations completed prior to July 1, 2001continued to be amortized through December 31, 2001.

SFAS 142 requires the use of a nonamortization approach to account for purchased good-will and certain intangibles. Under the nonamortization approach, goodwill and certainintangibles will not be amortized but instead would be reviewed for impairment and writtendown with a resulting charge to operations only in the period in which the recorded valueof goodwill and certain intangibles is more than its fair value. SFAS 142 requires theCompany to perform an evaluation of whether goodwill and indefinite-lived intangibleassets are impaired as of January 1, 2002, the effective date of the statement for theCompany. Additionally, SFAS 142 requires the Company to reassess the useful lives andresidual values of all intangible assets and make any necessary amortization adjustments.This impairment evaluation is required to be completed by March 31, 2002 for indefinite-lived intangible assets and by December 31, 2002 for goodwill.

At December 31, 2001, the Company had unamortized goodwill and indefinite-lived intan-gible assets in the amount of $507.4 million and $61.5 million, respectively, all of whichis subject to the transition provisions of SFAS 141 and SFAS 142. The Company is in theprocess of evaluating the effect that the transitional goodwill impairment provisions ofthis statement will have on its financial statements.

Selected business segment financial information for the years ended December 31, 2001,2000 and 1999 excluding goodwill amortization is as follows (in millions):

Income from Operations

2001 2000 1999

Domestic distribution $181.3 $154.2 $136.3International distribution 18.6 16.6 12.7Laboratory workstations 8.7 7.3 29.1Technology – – (6.1)Eliminations 0.4 (0.1) 0.6

Segment subtotal 209.0 178.0 172.6Restructuring and other charges (credits) 59.7 (2.0) (1.5)Nonrecurring charges 1.5 10.4 12.7

Total $147.8 $169.6 $161.4


49

In August 2001, the FASB issued Statement of Financial Accounting Standards No. 143,“Accounting For Asset Retirement Obligations” (“SFAS 143”). SFAS 143 addresses finan-cial accounting and reporting for obligations associated with the retirement of tangiblelong-lived assets and the associated asset retirement costs. SFAS 143 applies to legalobligations associated with the retirement of long-lived assets that result from the acqui-sition, construction, development and/or the normal operation of a long-lived asset, exceptfor certain obligations of lessees. This standard requires entities to record the fair value of a liability for an asset retirement obligation in the period incurred. The Company doesnot anticipate the adoption of SFAS 143 as of January 1, 2003, will have a material effecton its financial position or results of operations.

In October 2001, the FASB issued Statement of Financial Accounting Standards No. 144,“Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”). SFAS 144addresses financial accounting and reporting for the impairment or disposal of long-livedassets. This statement supersedes FASB Statement No. 121, “Accounting for the Impairmentof Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,” and the accountingand reporting provisions of APB Opinion No. 30, “Reporting the Results of Operations –Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual andInfrequently Occurring Events and Transactions.” This statement also amends ARB No. 51,“Consolidated Financial Statements,” to eliminate the exception to consolidation for a sub-sidiary for which control is likely to be temporary. This statement broadens the presentationof discontinued operations to include more disposal transactions. The provisions of thisstatement have been adopted as of January 1, 2002 and will be applied prospectively.

NOTE 23 | UNAUDITED QUARTERLY FINANCIAL INFORMATION

The Company’s common stock is listed on the New York Stock Exchange (“NYSE”) underthe trading symbol FSH. The following is a summary of quarterly financial information for2001 and 2000, including the high and low closing sales prices of the stock as reportedby the NYSE for each of the quarterly periods listed (in millions, except per share data):

2001First Second Third Fourth Year

Sales $687.0 $708.8 $729.5 $754.7 $2,880.0Gross profit 174.4 179.7 185.6 197.5 737.2Net income (loss)(a) (23.7) 12.2 16.9 11.0 16.4Net income (loss) per

common share:Basic $ (0.59) $ 0.25 $ 0.31 $ 0.20 $ 0.33Diluted (0.59) 0.23 0.30 0.19 0.31

Market price:High $39.88 $38.70 $27.41 $30.30 $ 39.88Low 32.40 24.70 21.70 24.20 21.70

2000First Second Third Fourth Year

Sales $653.2 $662.1 $662.3 $644.7 $2,622.3Gross profit 164.8 162.1 162.9 158.5 648.3Net income (loss)(b) 8.5 9.4 13.1 (8.3) 22.7Net income (loss) per

common share:Basic $ 0.21 $ 0.23 $ 0.33 $ (0.21) $ 0.57Diluted 0.19 0.21 0.30 (0.21) 0.51

Market price:High $49.63 $43.25 $35.44 $45.19 $ 49.63Low 32.06 24.73 20.06 34.06 20.26

(a) During the first and fourth quarter of 2001, Fisher recorded $51.6 million ($32.5 million, net of tax) and$8.1 million ($5.1 million, net of tax) restructuring charges, respectively. See Note 19 – Restructuring andOther Charges.

(b) During the third quarter of 2000, Fisher recorded a $2.0 million ($1.4 million, net of tax) restructuringcredit. See Note 19 – Restructuring and Other Charges. During the fourth quarter of 2000, Fisher recordeda $23.6 million ($14.9 million net of tax) write-down of investments in certain Internet-related ventures.


INDEPENDENT AUDITORS’ REPORT


To the Board of Directors of Fisher Scientific International Inc.:

We have audited the accompanying balance sheets of Fisher Scientific International Inc.and subsidiaries (the “Company”) as of December 31, 2001 and 2000, and the relatedstatements of operations, cash flows, and other changes in stockholders’ equity (deficit) and other comprehensive income (loss) for each of the three years in the period endedDecember 31, 2001. These financial statements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion on these financial statementsbased on our audits.

We conducted our audits in accordance with auditing standards generally accepted in theUnited States of America. Those standards require that we plan and perform the audit toobtain reasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, as well as

evaluating the overall financial statement presentation. We believe that our audits providea reasonable basis for our opinion.

In our opinion, the financial statements present fairly, in all material respects, the finan-cial position of Fisher Scientific International Inc. and subsidiaries as of December 31, 2001and 2000, and the results of their operations and their cash flows for each of the threeyears in the period ended December 31, 2001 in conformity with accounting principlesgenerally accepted in the United States of America.

New York, New YorkFebruary 1, 2002

2772FR finan 4.1 final 4/15/02 4:58 PM Page 50

CORPORATE PROFILE

Fisher Scientific International Inc. (NYSE: FSH) is the world leader inserving science. We enable scientific discovery and clinical-laboratory testing services by offering more than 600,000 products and services toover 350,000 customers in approximately 145 countries. As a result of itsbroad product offering, electronic-commerce capabilities, and integratedglobal logistics network, Fisher serves as a one-stop source of products,services and global solutions for many of its customers. The company’s primary target markets are scientific research and healthcare. Additionalinformation about Fisher is available on the company’s Web site atwww.fisherscientific.com.

F INANCIAL HIGHLIGHTS

YEARS ENDED DECEMBER 31,

Excludes restructuring and nonrecurring expenses 2001 2000 1999

(in millions except per share amounts)

Sales $2,880.0 $2,622.3 $2,514.5Adjusted operating profit 192.3 164.7 158.0Adjusted EBITDA 267.1 226.8 223.9Adjusted EPS from continuing

operations, diluted $ 1.04 $ 0.96 $ 0.75

See “Selected Financial Data” and “Management’s Discussion and Analysis of Results ofOperations and Financial Condition” for information regarding restructuring and nonrecurringexpenses. EBITDA in 1999 also excludes $7.8 million of gains from asset sales.

TABLE OF CONTENTS

2LETTER TO SHAREHOLDERS

4FISHER AT A GLANCE

6DEFINING THE MARKETSWE SERVEFisher serves scientists engaged in virtuallyevery aspect of research and healthcare.

8CREATING FUTURE PRODUCTS AND SERVICESFisher continuously reviews its product and service portfolio to ensure it meets the demands of today’s scientist.

10PROVIDING EXCELLENCE IN SERVING GLOBALCUSTOMERS With a global network of some 3,000 salesand customer-service representatives, FisherScientific offers its customers the highestlevels of personalized service.

12SEIZING THE FUTURETHROUGH TECHNOLOGICAL LEADERSHIPFor more than 30 years, Fisher has been aleader in e-commerce.

14GLOBAL LOGISTICSTechnology-based service capabilities atour logistics centers worldwide enableFisher to better serve its customers.

16DISCOVER THE FUTUREWITH FISHER

18FINANCIAL REVIEW

INSIDE BACK COVERDIRECTORS, EXECUTIVE OFFICERS, SCIENCE ADVISORS,CORPORATE INFORMATION

DIRECTORS

MITCHELL J. BLUTT, M.D.Executive PartnerJ.P. Morgan Partners, LLC

ROBERT A. DAY JR.Chairman and Chief Executive OfficerTrust Company of the West

MICHAEL D. DINGMANPresident and Chief Executive OfficerShipston Group Ltd.

ANTHONY J. DINOVIManaging DirectorThomas H. Lee Partners, L.P.

DAVID V. HARKINSPresidentThomas H. Lee Partners, L.P.

PAUL M. MEISTERVice Chairman of the BoardFisher Scientific

PAUL M. MONTRONEChairman of the Board andChief Executive OfficerFisher Scientific

SCOTT M. SPERLINGManaging DirectorThomas H. Lee Partners, L.P.

KENT R. WELDONManaging DirectorThomas H. Lee Partners, L.P.

EXECUTIVE OFFICERS

PAUL M. MONTRONEChairman of the Board andChief Executive Officer

PAUL M. MEISTERVice Chairman of the Board

DAVID T. DELLA PENTAPresident and Chief Operating Officer

KEVIN P. CLARKVice President andChief Financial Officer

TODD M. DUCHENEVice President,General Counsel and Secretary

SCIENCE ADVISORS

JOHN I. BRAUMAN, Ph.D.J.G. Jackson-C.J. Wood Professor ofChemistry, Stanford University

CHARLES R. CANTOR, Ph.D.Chief Scientific Officer ofSEQUENOM, Inc., Director of theCenter for Advanced Biotechnology,Boston University

LEROY E. HOOD, M.D., Ph.D.President and Director of theInstitute for Systems Biology

MICHAEL L. SHELANSKI, M.D., Ph.D.Delafield Professor of Pathologyand Chairman of the Departmentof Pathology, Columbia University

CORPORATE INFORMATION

HEADQUARTERSFisher Scientific International Inc.One Liberty LaneHampton, NH 03842Tel: (603) 926-5911www.fisherscientific.com

STOCK LISTINGFisher Scientific common stock islisted on the New York StockExchange under the symbol FSH.

STOCK TRANSFER AGENT AND REGISTRARInquiries concerning transfer requirements, stock holdings, dividend checks, duplicate mailings, and change of addressshould be directed to:Mellon Investor Services, LLC85 Challenger RoadRidgefield Park, NJ 07660Tel: (800) 756-3353www.mellon-investor.com

INVESTOR RELATIONSInvestors and analysts should direct their inquiries to: Director of Investor RelationsFisher ScientificOne Liberty LaneHampton, NH 03842Tel: (603) 926-5911

REQUESTS FOR REPORTSThe Fisher Scientific annual report onForm 10-K or quarterly reports on Form10-Q, as filed with the U.S. Securitiesand Exchange Commission, may beobtained without charge by writtenrequest to the Corporate Secretary at the headquarters address above. Thesereports are also available on theInternet at www.fisherscientific.com and www.sec.gov (search the EDGARArchives for “Fisher Scientific”).

Design: Critt Graham + Associates www.crittgraham.com This annual report was produced on recycled paper. © Fisher Scientific International Inc.

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Fisher Scientific International Inc.One Liberty LaneHampton, NH 03842603-926-5911www.fisherscientific.com

THE WORLD LEADER IN SERVING SCIENCE

DISCOVERINGTHE FUTURE

2001 ANNUAL REPORT

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DISCOVERING · Fisher Scientific International Inc. One Liberty Lane Hampton, NH 03842 603-926-5911 THE WORLD LEADER IN SERVING SCIENCE DISCOVERING THE FUTURE 2001 ANNUAL REPORT FISHER